Seagate posts 2012 financials, possibly eyeing OCZ acquisition

Seagate’s 2012 fiscal year has ended, and the company made a tidy profit. Over the last 12 months, the hard drive maker raked in profits of $2.9 billion on revenues of $14.9 billion. Both figures are substantial increases over 2011, when Seagate made $511 million off $11 billion in revenue. The firm’s gross margin was just 19.6% in 2011, but it rose to 31.4% for 2012.

Although Seagate made more money this year, it failed to meet its targets for the fourth quarter. Chairman and CEO Steve Luczo blamed the shortfall on an “isolated supplier issue” that affected one of Seagate’s enterprise-class hard drives. The supplementary commentary (PDF) says this issue cost Seagate 1.5 million “high-margin” drive sales in the fourth quarter. Luczo also mentioned the industry’s faster recovery from the Thailand flooding as a reason for Seagate’s missed targets. Looks like the company didn’t expect rival Western Digital to rebound so strongly.

Solid-state drives aren’t a big part of Seagate’s business, but that could soon change. Xbit Labs is reporting that former Micron General Manager of Enterprise SSDs Gary Gentry has re-joined Seagate to head up its SSD division.

The firm is reportedly looking to acquire a smaller SSD maker with enterprise credentials, as well. Rumor has it OCZ is in Seagate’s crosshairs. According to Reuters, Seagate CFO Pat O’Malley said the following when asked about a potential OCZ acquisition: “We look at all technology product providers (for M&A) but what I would say is that on the enterprise SSDs, there’s probably only one of them that really makes any significant money.” O’Malley declined to comment on OCZ specifically, stating, “We don’t do any comments on official policy on M&A until it’s done.” Interesting.

Comments closed
    • Bensam123
    • 7 years ago

    So, that’s why Seagate isn’t making their own SSDs… They just planned on outright buying a SSD company once they matured?

    That’s starting to sound like MS shenanigans. I wonder if WD has something similar planned.

    • continuum
    • 7 years ago

    Would be nice if I could get 1TB/platter nearline 7200rpm SATA disks… oh wait is that the issue they’re having?

    (hell my Seagate FreeAgent 4TB external desktop USB 3.0 orders have **ALL** been canceled/delayed repeatedly… ugh)

    • ronch
    • 7 years ago

    Still wondering why hard drive prices haven’t returned to pre-flood levels?

      • Derfer
      • 7 years ago

      They did awhile ago. You’re still looking at obsolete low demand sizes or focusing on WD. 3TB Seagate drives are lower than ever.

        • BobbinThreadbare
        • 7 years ago

        Near as I can tell, Seagate 3TB drives didn’t even exist before the flood.

      • Bensam123
      • 7 years ago

      They’re making more money and they can be dicks since there aren’t alternatives (they gobbled them up already).

    • jjj
    • 7 years ago

    there are more interesting things than that to report from their results call:

    “In the fall, we will be introducing our third-generation client hybrid drives, which will be in the 7-millimeter form factor. We will also be shipping demonstration units of our enterprise hybrid drives later this calendar year. We are encouraged by our engagements to date on this product, as several OEMs have requested exclusive access to this technology.

    In addition to the enterprise SSD products we are shipping today, our technology partnership with Samsung has progressed on plan and has resulted in a highly competitive Tier 0 product. We expect to be shipping customer test units of this product at the end of this quarter.

    To further deepen our SSD capabilities, we made a strategic investment in DensBits technology, and we are also jointly developing a next-generation solid state controller technology with DensBits that’s focused on breaking through current cost, reliability and performance benchmarks in the client and enterprise markets”

    [url<]http://seekingalpha.com/article/763611-seagate-technology-plc-management-discusses-q4-2012-results-earnings-call-transcript?page=3[/url<]

    • maxxcool
    • 7 years ago

    As long as they can fix the OCZ Ralph Nader firmware I’m fine with it… besides they are after the pci-e ssd’s not the consumer crap (literally)…

    • CampinCarl
    • 7 years ago

    I don’t think Seagate should be allowed to acquire OCZ. There’s too much consolidation going on in the computer parts business, and that’s bad for competition and thus bad for consumers. I don’t know if it would be the SEC or the FCC that would have jurisdiction to block such an acquisition, but whoever has the authority should excercise it.

      • Shambles
      • 7 years ago

      Look how bad the HDD market now that it’s only Seagate and Western Digital. I won’t be supporting any SSD brands that they end up acquiring.

      • Farting Bob
      • 7 years ago

      But there are a tonne of SSD companies. Just because there are only 2 consumer HDD manufacturers left doesnt mean that they should be banned from buying other companies which dont make HDD’s.

        • kamikaziechameleon
        • 7 years ago

        SSD WILL BE MORE AKIN TO RAM HONESTLY. Not even intel can do most of their drives entirely in house.

    • ludi
    • 7 years ago

    O-Seagate-Z.

      • Sargent Duck
      • 7 years ago

      OSZ?

        • ludi
        • 7 years ago

        Already an Apple trademark, most likely.

          • ClickClick5
          • 7 years ago

          This!

          Ah, good laugh!

    • Deanjo
    • 7 years ago

    Just when you thought seagates quality couldn’t dip any lower…..

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