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Seagate forecasts sales to rise despite Thailand floods

CEO decides to limit the extent of profiteering
Tue Nov 29 2011, 13:08

HARD DRIVE MAKER Seagate is forecasting analyst beating sales despite being hit by flooding in Thailand.

Both Seagate and Western Digital, the two largest hard drive makers, have been set back by the disastrous flooding in Thailand. While production in that area has ground to a halt, resulting in hard drive prices soaring, Seagate is now forecasting higher than estimated sales figures.

Seagate claims it withstood the effects of flooding better than other hard drive makers, and expects to ship 43 million hard disk drive units in the quarter ending in December. Those 43 million units should help Seagate rack up revenues of $2.8bn, beating analysts' expectations of $2.64bn.

As Seagate's factories were spared from the flood waters, Seagate's CEO Steve Luczo felt in a generous mood as his competitors were out of action. Luczo told Bloomberg that he could have raised prices by 40 per cent, but instead chose a 20 per cent price hike. Ah, the opportunity for commercial profiteering and perhaps an insight into what it would be like if there was just one hard drive manufacturer.

Luczo said he expects the hard drive industry to recover near the tail end of 2012 because of the industry's dependence on smaller firms that produce components. So even though Seagate's factories in Thailand were spared, some of the firm's component suppliers are facing an expensive clean-up bill.

In some cases hard drive prices have fallen from their peak last month. However, compared to the rise in prices, the declines are small and 1TB and 2TB hard drives are still retailing at around double the prices they were just two months ago. µ

 

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