Seagate Beats Street on PC, Cloud Demand

Hard-disk drive maker Seagate Technology’s quarterly profit and revenue beat the average analyst estimate as demand increased for its personal computer and cloud storage products.

Seagate shares rose nearly two percent in morning trading.

The company’s storage shipments grew 23 percent to 60 million exabytes for the first quarter, ended Oct. 3, Chief Executive Steve Luczo said on a post-earnings call with analysts. One exabyte equals one billion gigabytes.

The enterprise category, comprising Seagate’s cloud business, outperformed average analysts’ estimate the most — by seven percent, FBN Securities analyst Shebly Seyrafi said.

“I think (Seagate) did start shipping what looks like the eight-terabyte drive in the enterprise … that’s what’s helping their enterprise shipments,” Seyrafi said.

An improving PC market also helped, he said.

Seagate gets about two-thirds of its revenue from original equipment manufacturer customers, including PC makers.

Research firm IDC estimated earlier this month that worldwide PC shipments had fallen 1.7 percent in the quarter ended September — less than what analysts had feared, offset by a 4.3 percent growth in the United States.

More businesses in the United States and Europe upgraded computers or bought new machines in the quarter.

Net income attributable to Seagate fell to $381 million, or $1.13 per share, from $427 million, or $1.16 per share, a year earlier.

Excluding items, the company earned $1.34 per share.

Revenue jumped 8.5 percent to $3.79 billion.

Analysts on average had expected earnings of $1.24 per share on revenue of $3.63 billion, according to Thomson Reuters I/B/E/S.

Seagate forecast revenue of about $3.7 billion for this quarter. Analysts on average were expecting $3.68 billion.

The company’s shares were up 1.4 percent at $59.20 on the Nasdaq on Monday, after touching a month-high of $59.48.

(Reporting by Sai Sachin R and Anya George Tharakan; editing by Joyjeet Das.)

This article originally appeared on Recode.net.

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