Storage giant Seagate Technology has returned to profit in its fourthsk drive industry. Simon Robinson reports. quarter, but offered little reassurance that the ailing disk drive industry is recovering.
The California-based vendor posted net profit of $22 million, down 63 per cent from $59 million last year. But it was an improvement on the $129 million loss in the company's preceding quarter. Turnover was $1.6 billion, down 20 per cent from $2 billion last time.
For the year ending 3 July, Seagate recorded a net loss of $530 million, compared to a previous net profit of $658 million. Turnover was at $6.8 billion, down 24 per cent from $8.9 billion last year.
With Quantum barely turning in a fourth-quarter profit in April and Western Digital expecting fourth-quarter losses to exceed $100 million, Seagate initially appeared to have bucked the trend among the US storage giants.
'We are feeling positive given the current market,' said a Seagate representative.
'There are signs of improvement and demand is definitely picking up.'
But the market, looking for signs that the disk drive industry was picking up, failed to react positively to the results. By closing on 16 July, Seagate stock had fallen $2 to $25.5 since the announcement on 14 July.
Bob Peyton, director of European storage research at IDC, said: 'There is no end in sight to the crisis in the storage market.'
Dismissing claims that the disk drive industry was a victim of its own success, Peyton added: 'The problem is oversupply and this has been disastrous. One of the top tier vendors has to significantly scale down its operations and play in one area only.'
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