Thu, Oct. 29, 1:15 PM
- Western Digital's (WDC +1.7%) FQ1 results were roughly in-line with the outlook provided in its Oct. 21 pre-announcement (provided while announcing the SanDisk deal). The company guided on its earnings call (transcript) for FQ2 revenue of $3.3B-$3.4B and EPS of $1.50-$1.60, below a consensus of $3.45B and $1.75.
- Western is nonetheless trading higher. Archrival Seagate (STX -2.9%), which issued an FQ1 warning on Oct. 15 (enterprise share loss to Western is believed to be the culprit) and reports on Friday morning, is selling off.
- Western's gross margin fell 90 bps Q/Q and 120 bps Y/Y in FQ1 to 28.9%; it's expected to rise "slightly" in FQ2. $60M was spent on buybacks; Western has said it will suspend its buyback (while keeping its dividend) on account of the SanDisk deal.
- Hard drive shipments totaled 51.7M - 15.8M notebook, 11.7M desktop, 11.5M consumer, 5.6M branded, 7.2M enterprise - up from 48.5M in FQ4 and down from 64.7M a year ago. 66% of revenue came from non-PC markets, up from 55% a year ago (the SanDisk deal will further increase that number). Enterprise SSD revenue was $233M vs. $244M in FQ4 and $156M a year ago.
- On the earnings call (transcript), Western noted demand for high-capacity enterprise hard drives (beloved by Internet giants) was "somewhat softer than anticipated" due to the "absorption of previously deployed storage assets." Regardless, it still expects a 35% enterprise capacity CAGR through 2020.
- The company echoes others in declaring it sees "some signs of stabilization" in PC demand. Ahead of the SanDisk deal (will boost Western's SSD share and lower its flash costs), Western also reports seeing "a very competitive market" in enterprise SSDs.
- Western's FQ1 results, PR, datasheet (.pdf)
Thu, Oct. 22, 2:48 PM
- Shortly after giving Western Digital the go-ahead to integrate Hitachi's former hard drive unit with its core operations, China's Ministry of Commerce has given Seagate (NASDAQ:STX) approval to do the same with what used to be Samsung's hard drive unit (acquired in 2011).
- The only remaining conditions: Seagate can't require customers to exclusively buy from the company, and TDK China can't be forced to sell hard drive heads exclusively to Seagate.
- Among other things, integration enables Seagate to achieve greater manufacturing scale, remove duplicate functions, and jointly source components from suppliers. Shares are up sharply on a day the Nasdaq is up 1.4%.
- Yesterday: Seagate makes CFO change
Mon, Oct. 19, 9:18 AM
- More than three years after Western Digital (NASDAQ:WDC) closed its acquisition of Hitachi's hard drive unit (HGST), China's Ministry of Commerce has approved integrating the business with Western Digital proper.
- The company will continue selling products under both the HGST and Western Digital brands, and maintain separate sales teams for two years. However, it plans to start integrating "corporate and other key functions, including [R&D], heads and media operations, engineering and manufacturing."
- HGST president Mike Cordano has been appointed to the newly-created position of COO. Western president Jim Murphy will now run the company's storage devices unit.
- Western is up 3.6% premarket. Archrival Seagate (NASDAQ:STX), hit hard last week by an FQ1 warning that some analysts argued indicates enterprise share loss to Western, is down 1.2%.
- Update (10:39AM ET): Western has given back its early gains. Seagate is down 2%.
Thu, Oct. 15, 12:46 PM
Thu, Oct. 15, 9:17 AM
- Seagate (NASDAQ:STX) now expects to report FQ1 revenue of $2.9B vs. prior guidance of $2.9B-$3.1B and a $3.03B consensus. Unit shipments are expected to total 47M - up from FQ4's 45.3M but down from 59.5M a year ago - with Seagate maintaining a 40% share (implies a total market of 117.5M).
- Gross margin (non-GAAP) is now expected to be at 24%, below prior guidance of 27% and down from 27.2% in FQ4 and 28.1% a year ago. Seagate blames lower-than-expected demand for 4TB and 6TB nearline hard drives. An 8TB product was recently announced.
- FQ1 op. cash flow is expected to total $800M. 20M shares were repurchased.
- CEO Steve Luczo: "While Seagate had strong operating cash flows and made significant progress in cost containment in the September quarter, we are disappointed we did not execute a product portfolio that fully addressed the demand in the nearline market. Looking ahead, we are confident that our nearline product portfolio will be fully competitive by our fiscal third quarter."
- Full FQ1 results arrive on the morning of Oct. 30. Western Digital (NASDAQ:WDC), recently rumored to have held buyout talks with SanDisk, is following Seagate lower. Seagate also issued an FQ4 warning in July.
Thu, Oct. 15, 9:13 AM
Wed, Sep. 30, 9:13 AM
Wed, Sep. 30, 8:02 AM
Fri, Sep. 18, 11:48 AM
- Longbow Research thinks hard drive shipments have trailed PC shipments in 2015, making a positive inventory corrective possible. The firm considers expectations for a Q3 addressable market (TAM) of 115M units achievable - Western Digital previously estimated (.pdf) a Q2 TAM of 111M, down sharply from 138M a year earlier - and sees potential upside to 120M.
- Seagate (STX -1.9%) and Western Digital (WDC -3.3%) are nonetheless selling off on a day the Nasdaq is down 0.5%. Seagate is 8 days removed from announcing it's cutting 1,050 jobs in response to "the current macroeconomic business environment."
- Related ticker: HTCH
- Last week: Citi, Wells Fargo report seeing stabilizing PC demand
Thu, Sep. 10, 8:26 AM
- Seagate Technology (NASDAQ:STX) -2.1% premarket after disclosing plans to cut 2% of its global workforce, or ~1,050 jobs, as part of a restructuring plan it says will save $113M annually.
- STX says the restructuring plan is “intended to realign its cost structure with the current macroeconomic business environment.”
- STX expects ~$53M in related pretax charges, with most booked in the current quarter.
Wed, Sep. 2, 4:15 PM
- Seagate (STX -1.6%) has used its 2015 analyst day to state it's aiming for ~10% FY16 (ends June '16) EPS growth. Consensus is for EPS to drop 3% to $4.44, before rising 13% in FY17 to $5.04.
- The hard drive giant is targeting 2%-5% organic revenue growth in FY16 and FY17 - consensus is for a 7.7% FY16 decline and 2.9% FY17 growth. Gross margin is expected to be in a range of 27%-32%, after coming in at 28.1% in FY15. Seagate aims to grow its annual dividend payout (currently $2.16/share) by 10%/year.
- Seagate estimates it received 57% of its FY15 revenue from cloud and "new storage" applications, up from 43% in FY12. The company is a day removed from announcing it's the first company to provide 1TB of capacity per platter on a 2.5" drive, and that the breakthrough enables a 2TB that's only 7mm thick.
- Shares moved lower on a day the Nasdaq rose 2.5%.
- Analyst day slides (.pdf)
Tue, Aug. 18, 7:21 PM
- Seagate (NASDAQ:STX) is buying Dot Hill Systems (NASDAQ:HILL), a maker of modular storage arrays and related software, for $694M in cash ($645M exc. net cash), or $9.75/share. The price represents an 88% premium to Dot Hill's Tuesday close.
- Seagate: "Dot Hill's external storage array-based systems and software products will complement and expand Seagates storage systems offerings ... Seagate will leverage Dot Hills storage technology IP portfolio and software capabilities to drive innovation ... we expect the transaction to be accretive to non-GAAP earnings in fiscal 2016."
- Various Dot Hill arrays target market segments such as SMBs, video post-production, high-performance computing (HPC), and telecom carriers. Hybrid flash/disk arrays are among the products. With Dot Hill's 2015 revenue consensus at $245.1M, Seagate is paying 2.6x forward sales.
- The deal is expected to close in calendar Q4. It follows Seagate's 2014 purchase of storage subsystem/hard drive equipment maker Xyratex, and will lead Seagate to further compete with buyers of its enterprise hard drives and SSDs.
- Dot Hill has soared to $9.65 in after hours trading.
Wed, Jul. 29, 6:39 PM
- Western Digital (NASDAQ:WDC) has guided on its FQ4 call for FQ1 revenue of $3.2B-$3.3B and EPS of $1.50-$1.60, below a consensus of $3.5B and $1.76. However, a light outlook was expected following Seagate's warning and a deluge of soft PC data.
- Western has risen to $83.11 AH. Seagate (NASDAQ:STX) has risen to $50.74 ahead of Friday morning's FQ4 report.
- Western's FQ4 results, PR
Mon, Jul. 13, 8:16 AM
- Seagate (NASDAQ:STX) expects revenue of about $2.9B for FQ4 vs. guidance of $3.2B-$3.3B. Non-GAAP gross margin should be roughly 28.5%, with non-GAAP operating expenses of $530M vs. guidance of $555M.
- The company cites lower-than-expected intra-quarter demand.
- Unit shipments should be about 45M, maintaining market share of roughly 40% and reflecting approximately 52 exabytes.
- Full FQ4 results are due ahead of the bell on July 31.
- Source: Press Release
- Shares -2.6% premarket
Mon, Jul. 6, 9:53 AM
- Cautious Cleveland Research remarks about near-term hard drive demand have led Seagate (NASDAQ:STX) and Western Digital (NASDAQ:WDC) to slump out of the gate. The Nasdaq is down 0.4%. This isn't the first time a downbeat Cleveland note has had such an effect.
- Seagate/Western fell two weeks ago after JPMorgan downgraded Western to Neutral, while citing weak PC sales. Both companies also sold off a few days later thanks to Micron's results/guidance.
Fri, Jun. 26, 8:20 AM
- Intel (NASDAQ:INTC) is down 1.7% premarket, Seagate (NASDAQ:STX) is down 1.4%, and Western Digital (NASDAQ:WDC) is down 1.1% after Micron (down 15.1%) missed FQ3 estimates and provided soft FQ4 guidance, while largely blaming PC weakness and its impact on DRAM prices. SanDisk is also off.
- Intel, Seagate, and Western have already seen a decent amount of PC-related concerns priced in. The industry is counting on Windows 10 (launches on July 29) and Intel's Skylake CPU platform (expected to begin rolling out in late summer) to spark a rebound.
Seagate Technology PLC is a provider of electronic data storage solutions. Its products are hard disk drives, hard drives or HDDs. It also produces range of electronic data storage products including SSHD, SSD, PCIe cards and SATA controllers.
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