EMC Beats Expectations, Sees More Comfort in Budgets
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Thursday, 22 October 2009
By Mel Duvall
In a further sign that the economy is moving forward, storage giant EMC reported better-than-expected results Thursday and said it was feeling more confident in customers' purchasing plans.
In a statement announcing the third quarter results, chief executive Joe Tucci said, "Customers are signaling more comfort spending their IT budgets, which gives EMC confidence in our ability to perform well and achieve our full-year 2009 targets."
The company reported third quarter earnings of $298.2 million, or 14 cents a share, on revenue of $3.52 billion. That represented a 5% decrease from the previous year, but was up 8% compared to the second quarter of 2009. The results exceeded the company's own outlook of 4% to 5% sequential quarterly revenue growth, and beat Wall Street expectations by about two cents a share.
Tucci said he was pleased with the company's performance in the challenging economic climate and expressed optimism about EMC's ability to capitalize on "four of the higher-growth, multi-billion-market opportunities around fully virtualized data centers, cloud computing, virtualized desktops and clients, and next generation backup and recovery."
VMware, which is majority owned by EMC, also reported its results, which showed some gains. VMware reported net income of $38 million, or 9 cents per share, down from $83 million or 21 cents per share for the same period a year ago. Revenue for the quarter was up 4% from a year ago to $489 million.
Chief Financial Officer Mark Peek said the company is also seeing improved stability among its customers base. "Our solid third quarter results were driven by strength in the US Federal sector, increased transaction volumes and particularly robust growth in our maintenance renewals," he said in a statement. "While the economic environment remains challenging, we have improved visibility into our business and believe that the next two quarters will follow seasonal patterns."
The following are some of the highlights from EMC's results:
EMC's information infrastructure business, comprising product and services revenue from storage, RSA Security and content management and archiving, reached $3.03 billion, an 8% increase.
Growth in the information infrastructure business was driven by demand for EMC's high-end storage lines, as well as its next-generation backup and recovery offerings.
Third quarter revenue in the U.S. reached $1.9 billion, up 13% sequentially, and representing 54% of total revenue.
Revenue from EMC's operations outside the U.S. reached, $1.62 billion, up 3% and representing 46% of total revenue.
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