Seagate was caught out by an unexpectedly deep drop in disk drive demand and saw its revenues fall 7 per cent. Along with the rest of the tech world, it talked about a recovery mid-year, and promised world+dog at least one more lousy quarter.Earlier, Mellor reported on Western Digital's even worse woes in Weak flash demand and disk sales leave Western Digital scrabbling to claw back $800m a year:
Reported revenues (PDF) for its second quarter of fiscal '19, ended 28 December, were $2.7bn, down 6.8 per cent on last year's $2.9bn. The company said cost cuts helped profits rise from $159m last year to $384m.
The company shipped 87.4EB of capacity, down from the 87.5EB shipped a year ago, and averaging out at 2.4TB/drive. The big fall was in nearline drive demand, as a Seagate chart shows. It expected a fall two quarters ago but not this deep.
Western Digital is about to go into cost cutting mode to carve out $800m in savings, after reporting shrinking revenues of $4.23bn for its second fiscal 2019 quarter, down by a fifth compared to the year ago period.
Losses were almost halved from $823m to $487m for the three months ended 28 December 2018. Gross margin was 31.3 per cent and operating cash flow stood at $469m. It built 30.3 million disk drives in the quarter, compared to 42.3 million.
Western Digital now makes both flash and disk products: flash revenues came in at $2.2bn, down 18 per cent year-over-year and disk was down 23.5 per cent to $2.1b. Disk exabytes shipped in the quarter declined 17 per cent on the year.