Seagate FY 2Q16 Earnings Call Notes

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Seagate Technology’s (STX) CEO Steve Luczo on Q2 2016 Results

Shipped 60 exabytes of storage

“Our HDD exabyte shipments for the December quarter were 60.6 exabytes, up 10% sequentially. Within this, enterprise exabyte shipments were up 21% sequentially, reflecting strong demand for our high-capacity enterprise products. Average capacity per enterprise drive was a new record of 2.2 terabytes, up 15% year-over-year.”

Surveillance and video applications growing rapidly

“Surveillance and video applications are growing rapidly and they are seeing strong demand for our products specifically designed for these workloads. Our retail, gaming and client offerings are continuing to move to higher capacity points and are benefiting from the recent launch of products with industry leading areal density.”

Global economic concerns should persist at least through June

“In the last several quarters, we have discussed our concerns over global economic conditions, particularly in Europe and China, which have proven accurate and we believe will persist at least through June this calendar year.”

Expect overall storage market demand will be seasonally down

“Taking into account macroeconomic factors, we believe overall storage market demand will be seasonally down in the March quarter which has ranged between 5% and 10% over the last five years. We are planning for revenues to be approximately $2.7 billion, which reflects the high end of the seasonal demand trend and operating expenses to be sequentially flat.”

Toshiba probably wont be in this business in one to three years

“if you had asked me where was my gauging of would Toshiba be in the business in the next one to three years today versus where was it six months or a year ago, I am much more towards the end that they are not going to be in this business in the next one to three years, just because I don’t how I see how they can be competitively, given where areal density is going and given where manufacturing is and given some of their bigger corporate issues, I just can’t imagine that that’s where they want to spend their R&D expense or frankly their cash flow.’