When disk drive maker Western Digital
Well, Seagate's side of the story is in, and it's actually a little bit different. Instead of participating in the quarter-ending clearance sales, Seagate lowered its prices much earlier and then held firm through the end-rush, resulting in average price declines similar to Western Digital's but along a different route.
The end result for Seagate was $2.7 billion in sales, 1.3% above the year-ago quarter, while earnings dwindled by 11% to $0.31 per diluted share. You see the effects of firm pricing policies on the bottom line, which shrunk slower than Western Digital's, and also in revenues, where Western Digital had a 9% year-on boost. Seagate managed its inventories by scaling down its production plans instead of holding a fire sale.
Regarding the pending buyout talks, SEC regulations forbid Seagate from saying much. That prevented Seagate from issuing forward guidance, which has become a highly watched measure in the broader memory and semiconductor market as investors worry about a pullback.
Still, as far as a buyout goes, while a private equity firm is showing interest right now, given the current state of the IT industry, I wouldn't count out interest from Oracle
Seagate has gone private and then returned to the public markets once before and it could happen again. Penny-pinching valuations and muscular business like Seagate's make it the buyout flipper's dream come true. Moreover, data storage is at the very center of the next tech revolution, so a cheap buy today should offer great returns in a couple of years for a patient buyout firm.