Seagate (STX) Issues Update Amid Thai Floods: Raises Q2 Sales Outlook, Offers Initial Q3 Guidance
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Price: $850.00 -0.03%
Financial Fact:
Marketing and administrative: 155M
Today's EPS Names:
BTTX, VAXX, ELYS, More
Financial Fact:
Marketing and administrative: 155M
Today's EPS Names:
BTTX, VAXX, ELYS, More
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Shares of Seagate (NYSE: STX) have rallied more than 6 percent in Monday's post-market trading session following an update to its second-quarter sales and shipment guidance and an initial third-quarter outlook. After closing at $15.99, the stock last traded at $17.05.
Seagate is now expecting second-quarter sales of $2.8 billion, up modestly from prior guidance of $2.6-$2.7 billion given during the company's first-quarter conference call on November 3rd. Shipments move from 41-45 million units to 43 million. Analysts on the Street are currently looking for quarterly sales of $2.64 billion.
For the third quarter of 2012 (the March quarter), Seagate said it is anticipating sales of $3.75 billion, well above the $3.24 billion expected by analysts. Gross margin as a percentage of sales is expected to be at least 300 basis points above the previously targeted 22-26 percent.
From the release:
The company continues to believe that, due to the industry impacts caused by the extensive flooding in Thailand, hard disk drive supply will be significantly constrained for several quarters. For the December 2011 quarter, the company believes the industry will ship between 110-120 million units.
The company believes the industrys ability to manufacture and ship hard disks drives will gradually improve throughout calendar 2012. While this may alleviate some of the unit demand shortfall, it is expected that some companies will optimize unit shipments by manufacturing lower component count/lower capacity hard disk drives; thereby, only modestly offsetting the growing petabyte shortage. Because demand is estimated to significantly exceed supply during this time, pricing is expected to remain stable.
The companys component and disk drive factories in Thailand have not been directly affected by the flood; however, the companys ability to manufacture hard disk drives has been impacted due to external component supply constraints as first disclosed on October 12, 2011.
Seagate is now expecting second-quarter sales of $2.8 billion, up modestly from prior guidance of $2.6-$2.7 billion given during the company's first-quarter conference call on November 3rd. Shipments move from 41-45 million units to 43 million. Analysts on the Street are currently looking for quarterly sales of $2.64 billion.
For the third quarter of 2012 (the March quarter), Seagate said it is anticipating sales of $3.75 billion, well above the $3.24 billion expected by analysts. Gross margin as a percentage of sales is expected to be at least 300 basis points above the previously targeted 22-26 percent.
From the release:
The company continues to believe that, due to the industry impacts caused by the extensive flooding in Thailand, hard disk drive supply will be significantly constrained for several quarters. For the December 2011 quarter, the company believes the industry will ship between 110-120 million units.
The company believes the industrys ability to manufacture and ship hard disks drives will gradually improve throughout calendar 2012. While this may alleviate some of the unit demand shortfall, it is expected that some companies will optimize unit shipments by manufacturing lower component count/lower capacity hard disk drives; thereby, only modestly offsetting the growing petabyte shortage. Because demand is estimated to significantly exceed supply during this time, pricing is expected to remain stable.
The companys component and disk drive factories in Thailand have not been directly affected by the flood; however, the companys ability to manufacture hard disk drives has been impacted due to external component supply constraints as first disclosed on October 12, 2011.
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