The economic crisis has slammed into Seagate's quarterly earnings, with the storage company suffering an 83.1 percent drop in net income.

Several recent earnings reports from storage companies signal a downturn - EMC, Imation, QLogic and Sun for example. Seagate is now following suit.

For its first fiscal 2009 quarter to the end of September Seagate's revenues were $3.03bn, down 8.2 per cent from last year's $3.3bn with 48 m drives shipped compared to the number a year ago of 47 million. Despite the extra million drives Seagate's net income fell from $355m ($0.64) in Q1 fy08 to $60m ($0.14) this quarter.

Seagate boss Bill Watkins said that net income was $71m ($0.14 per share) down due to amortisation of intangibles and charges for acquisitions and restructuring. He's now talking of being well-positioned for the future, an acknowledgement that the next few quarters could be bloody.

“With a strong balance sheet, Seagate is operating from a position of strength. Looking forward, in the face of a challenging macro-economic environment, we will focus on cost controls and inventory management while continuing to invest in the key technologies that will solidify product leadership. As a result, we remain highly confident in our ability to convert the long-term growth in demand for storage into superior value for our shareholders.”

For the December quarter, Seagate expects to report revenue of $2.85bn to $3.05bn, and diluted net income per share of $0.12 to $0.16 (net income of $60m - $80m).

This compares to last year's $3.4bn revenues and net income of $403m or $0.73 per share based on 50 million drives shipped. So Seagate is probably expecting to ship fewer drives and have another 80 per cent plus drop in net income on a quarterly basis. Let's hope it doesn't get worse than that. ®