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What: Shares of hard-disk-drive maker Seagate Technology (Nasdaq: STX ) are spinning much faster today, up by 24% at the high, after the company reported second-quarter earnings.
So what: Revenue added up to $3.2 billion, leading to earnings per share of $1.32. The company moved 47 million disk drives during the quarter, as the sector is still recovering from the floods in Thailand last year. Seagate just closed its acquisition of Samsung's HDD business during the quarter, and has recognized $5 million in amortization of intangibles this quarter, with another $35 million expected in the third quarter.
Now what: The HDD shortages have helped Seagate boost pricing, while its production wasn't hurt as badly as rival Western Digital (NYSE: WDC ) . The company said its biggest customers are now trying to lock down supply through long-term contracts. This would represent a big shift in the industry, as computer makers have historically pitted suppliers against one another on pricing. CEO Steve Luczo said such contracts are "new to the disk-drive industry and represent a structural change to the way we do business."
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