Posted by: Beth Pariseau
Disk drive maker Seagate Technologies last night reported its earnings for its fiscal second quarter of 2010 (ending on Jan. 10), and the results follow on IBM’s storage sales upswing with continued reports of an enterprise storage spending rebound.
“Over the course of calendar year 2009 the technology industry has improved faster than the broader economy and the storage sector has outperformed almost every other sector in technology,” CFO Stephen Luczo said on the company’s earnings call. “As a result, the demand for storage continued to accelerate throughout the calendar year.”
Still, Seagate was not planning for an economic rebound during the quarter and officials said it came as something of a pleasant surprise to see stronger than forecasted demand. The company’s top line revenue for the quarter was $3 billion, a 33% increase year-over-year and a 14% increase sequentially. Net income was $533 million, and the company was able to generate $753 billion in operating cash flow and repaying $246 million in debt, which Stifel Nicolaus Equity Research analyst Aaron Rakers wrote in a note to clients this morning was the biggest quarterly cash flow generation the company has achieved since his firm began tracking it in 2001.
Wall Street analysts, many of which were also pleasantly surprised by earnings from Seagate above their estimates, are now looking to see this boon for Seagate ripple out to its enterprise storage OEMs, especially EMC, which reports calendar first-quarter earnings Tuesday.