Tech News - Seagate 2nd Quarter Profits Rise on Higher Sales

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Seagate 2nd Quarter Profits Rise on Higher Sales

01/09/2003

SCOTTS VALLEY, Calif. (Reuters) - Seagate Technology HDD Holdings, a disk drive maker that recently held an initial public offering, said on Thursday its profits rose in its second fiscal quarter from a year earlier as sales of its more expensive products increased.

The company's chief executive also gave a vote of confidence in the technology sector, saying that while the most recent quarter was challenging, he sees signs that demand may be firming.

"Relative to the last two to three years where the environment has been unpredictable, we believe there is now more stability in the industry and perhaps a slight firming in demand for technology products," Steve Luczo said during a conference call.

The technology sector has been hurt as companies concerned about profits during the economic downturn cut back on buying new computers and related equipment.

Other companies that sell data storage products have given positive reports about the sector this week including EMC Corp. and McData Corp., leading some investors to speculate about a rebound in the sector.

Shares in the largest U.S. maker of the hard disk drives used to store data rose in after hours trading to $12.95 compared with their close of $12.60. Seagate released its financial results right after the close of market.

Seagate said its income rose to $198 million, or 43 cents per share, in the second quarter ended Dec. 27, from $124 million, or 31 cents per share, a year earlier.

Its revenues rose to $1.73 billion from $1.63 billion a year earlier.

Luczo said in an interview that the company gained market share during the quarter and that its more expensive high-performance disk drives that are used in desktop computers accounted for a larger percentage of sales.

He also said that he believes that there was more to a resurgence of strength for technology companies than a spike in demand from corporations spending their remaining technology budgets before the end of the year.

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