Bloomberg News

Seagate Rises After Forecast Tops Estimates: San Francisco Mover

February 02, 2012

Feb. 1 (Bloomberg) -- Seagate Technology Plc, the world’s largest maker of computer disk drives, gained the most in three months after forecasting higher annual sales than analysts estimated.

Seagate climbed 21 percent to $25.53 at the close today after the Cupertino, California-based company predicted sales of about $20 billion for calendar 2012. Analysts had estimated $17.5 billion, according to data compiled by Bloomberg. The stock increase was the biggest one-day gain since Oct. 21.

Seagate has bounced back from last year’s floods in Thailand, which sidelined much of the disk-drive industry. Unlike factories owned by competitors, Seagate’s plants weren’t hit directly by floodwaters, helping it recover quickly. Meanwhile, drive shortages have helped push up prices, giving a boost to the company’s bottom line.

Fiscal second-quarter net income more than tripled to $563 million, or $1.28 a share, from $150 million, or 31 cents, a year earlier, the company said yesterday in a statement. Sales increased 18 percent to $3.2 billion in the period, which ended Dec. 30.

Floodwaters engulfed much of the industrial heartland north of Bangkok last year, hampering production of disk drives and components. Western Digital Corp., Seagate’s biggest rival, had to close down production, though it too recovered more quickly than investors had anticipated.

--Editors: Romaine Bostick, Nick Turner

To contact the reporter on this story: Nick Turner in San Francisco at nturner7@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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