Seagate Q3 FY 2014 result: revenue drops 3%, net income slips 5%

Seagate Technology today said its Q3 FY 2014 revenue decreased 3.47 percent to $3,406 million, while net income dropped 5.04 percent to $395 million.

During the March quarter, Seagate shipped 50.8 exabytes of storage and average 920 gigabytes per drive across its portfolio.

For fiscal year 2014, Seagate capital investments (Capex) are running below its long-term targeted range of 6 percent to 8 percent of revenue and it will most likely be below the range for the full fiscal year.

Growth in mobile, personal devices, video surveillance and big data analytics will continue creating significant demand for next generation storage systems and solutions, said Seagate.

The storage vendor continued its innovation. Seagate added 6 terabyte nearline enterprise drive, its highest capacity, self-encrypting product for server and storage systems and the fastest nearline drive on the market. Seagate expects strong ramp for this product in the second half of the calendar year, as enterprise cloud customers continue to push for higher density drive technology.

Steve Luczo, president, CEO and chairman of Seagate

Seagate said its seventh-generation surveillance drive, which can store over 500 hours of HD video, is specifically designed for the high right workloads of surveillance applications. It is estimated that surveillance cameras worldwide are producing over 400 petabytes of data each day. This market will continue to be a high growth opportunity for Seagate.

For the June quarter, Seagate is targeting revenues of at least $3.3 billion and operating expenses of $505 million, including the acquisition of Xyratex.

Seagate said a few significant enterprise customers are absorbing in-house drive inventory and reducing disk drive purchases in the June quarter as they prepare for their new product introductions planned for the second half of the calendar year.

A number of cloud service providers have accelerated their time to deployment and have improved overall utilization and existing cloud infrastructures during the last three to four quarters, thereby absorbing their in-house drive inventory over the last two to three quarters.

Steve Luczo, Seagate’s chairman and chief executive officer, said: “we are planning for a stronger market demand in the second half of the calendar year as these entities deploy new build outs.”

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