Seagate Reports Q2 2009 Preliminary Results

Seagate, the world's leading manufacturer of traditional hard disk drives, announced on Wednesday the preliminary results for the quarter ended on January 2, 2009. According to the report, the company recorded 37 million disk drive unit shipments, with a revenue of $2.3 billion and a net loss of $496 million, or $1.02 per share, for the quarter ended on January 2, this year.

 

As expected, Seagate was considerably influenced by the current market conditions, which lead to weaker consumer demand for traditional hard disk drives. The announcement is relatively similar to that of many other major companies in the IT sector, which have also been affected by the global economic downturn, consequently being forced to take drastic measures, such as cutting jobs, reducing salaries and giving unpaid days off.

 

The announcement was pretty much in line with analysts' expectations, which projected a revenue of $2.495 billion. However, Seagate reported a revenue of $2.3 billion, down from $3.42 billion in the precedent year. In an attempt to lower the effects of the slow global economy, Seagate announced a cut of 6 percent in its employees, also replacing its chief executive officer, earlier this month.

 

“We remain focused on executing against our business plan and on aligning the company’s cost structure with the current economic reality,” said Steve Luczo, the company's new chairman, president and chief executive officer. “We continue to believe that Seagate has a solid future and view the long-term prospects for storage to be positive; however, there are significant near-term challenges facing Seagate that we believe could potentially continue through the end of the calendar year and into 2010,” he added.

 

In the past year, Seagate has seen its stock drop by about 80 percent, while one of the company's main competitors, Western Digital only recorded a 46 percent drop of its value.