Seagate Looks Beyond Lumpy Clouds

NEW YORK (TheStreet) -- Despite experiencing some second-quarter softness in enterprise hard drives, Seagate (STX) remains confident of robust data growth in 2014.

Seagate missed Wall Street's top and bottom-line estimates in its fiscal second-quarter results, released after market close on Monday, sending its shares slumping.

"It may be lumpy, but we're still convinced that for the full fiscal year and even calendar year 14 we're going to have the growth rates that are going mirror what we have seen in the last several quarters, that have been close to 30% year over year," said Seagate CFO Pat O'Malley, in an interview with TheStreet. "We're going to get these little bumps - we view them as bumps, not as major constructional flaws in our business model."

The finance chief explained that any short-term demand weakness should be viewed within the context of massive service provider deployments of cloud infrastructure, which run over a relatively long time period.

"This isn't a race to the finish line every 90 days," he said. "Some of these rollouts take six to nine months, so if they miss by a month or two months, that's within their planning cycle."

Cloud hardware rollouts are a major growth driver for Seagate, which touts a number of drives for enterprise data centers. This includes high-performance drives for cloud computing such as the Enterprise Performance 15K and storage drives such as the Enterprise Capacity 3.5.

"Our biggest growth engine has longer cycles than these quarter-to-quarter cycles that the PC guys have been very accustomed to," added O'Malley. "These are big, big [cloud] infrastructure events that these folks are taking and they are long projects."

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