A rapidly growing demand for more storage capacity is pushing the hard drive industry into a period of significant growth. Leading the pace is Seagate, which said that it sold more than 119 million hard drives in the past 12 months. The company ended its fiscal 2006 with revenues that increased 22% to $9.2 billion and profit; net income increased from $707 in 2005 to $840 million in fiscal 2006.
The acquisition of Maxtor, a manufacturer that posted substantial losses in most recent quarters, weighed on Seagate's fiscal Q4 result. While Maxtor contributed $279 million to Seagate's $2.53 billion revenue, Seagate had to swallow $146 million in accounting charges during the period as well as a loss from Maxtor's operating results of about $72 million. The loss possibly could have been even higher, if Maxtor had become a part of Seagate earlier: Maxtor's results were included for less than half of the quarter - from 19 May to 30 June. The firm's net income dropped from $280 million in Q4 of 2005 to $7 million this year.
Seagate expects to reach $11.8-12.3 billion in revenues in fiscal 2007, which began on 1 July.