Seagate Earnings Jump on Cost Cuts, Storage Demand

Seagate Technology PLC said its profit more than tripled in the September quarter, boosted by the company's recent cost cuts and increasing demand for its cloud-storage products.

Seagate, one of the biggest makers of disk drives, has suffered because of weakening demand for personal computers that use its storage products. In response, the company has cut jobs and costs, among other actions.

Wednesday, Seagate pointed to better-than-expected demand for its high-capacity hard-disk drives for cloud storage by businesses.

Over all, for the company's fiscal first quarter, Seagate reported a profit of $167 million, or 55 cents a share, up from $34 million, or 11 cents a share, a year earlier. Excluding certain items, the company recorded earnings of 99 cents per share, better than the average analyst estimate of 89 cents on FactSet.

Seagate's total operating expenses fell 9.3% to $2.58 billion in the first quarter.

Revenue declined 4.4% to $2.8 billion year-over-year, and gross margin rose to 28.6% from 23.6%, confirming what the company pre-reported earlier this month.

Shares of Seagate fell 2.2% to $34.55 in morning trading in New York. The stock has fallen about 10% over the past year.

(END) Dow Jones Newswires

October 19, 2016 15:15 ET (19:15 GMT)

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