Seagate Quarterly Revenue Down Almost A Quarter

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Results still beat analyst expectations, yearly revenue remains high and the company is optimistic

Seagate, one of the world’s largest manufacturers of storage equipment, has reported its fourth quarter revenue fell to $3.43 billion (£2.23bn), from $4.5 billion a year earlier. The results came in slightly above analyst expectations, however.

Seagate’s drive shipments were down 18 percent year-on-year, amid a serious slowdown for the PC market as a whole. Earlier this month, research and advisory firm Gartner reported that in the second quarter of 2013, worldwide PC shipments fell 10.9 percent year-on-year, as consumers have been tempted away by smartphones and tablets.

A shift in storage

Seagate shipped 53.9 million drives in the three months ending with June 28, down from 65.9 million a year earlier. This resulted in a net income of $348 million.

Enterprise Turbo SSHDOverall results for the 2013 fiscal year show revenue of $14.4 billion– the second highest yearly result in the company’s long history – and net income of $1.8 billion.

Seagate shares, which have risen 24 percent in the last six months and are currently trading at all-time highs, closed at $45.31 on the NASDAQ on Tuesday.

“Seagate’s financial results reflect strong execution in a time of change, uncertainty and opportunity,” said Steve Luczo, Seagate’s chairman, president and CEO. “Looking ahead, we believe the market trends of data growth driven by cloud, mobile and open source advancement will present new and significant opportunities for Seagate.  We will continue to balance near-term financial performance and long term strategic development while maximizing shareholder value.”

The drop in revenue reflects the state of the computing industry, as part of the market shifts from traditional hard drives to Flash memory. Seagate had a late start with Solid State Drives (SSDs), but the company has been making progress with its new Flash strategy, revealed earlier this year.

On Tuesday, Seagate launched what it calls the “world’s fastest” enterprise hard drive. The Enterprise Turbo SSHD is a combination of spinning discs and NAND modules that provides up to a 3x increase in random performance over existing solutions.

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