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By Mel Duvall
EMC reported a 58 percent surge in profits in the fourth quarter as the storage giant saw strength in its information infrastructure business and an improvement in economic conditions.
Hopkinton, Mass.-based EMC said Tuesday that revenue in the fourth quarter of 2009 reached a record $4.1 billion, which marked a 2 percent gain on a year-over-year basis, and a 17 percent sequential increase over the third quarter. Fourth quarter net income reached $426.5 million, a 58 percent jump over the same quarter of the previous year, and a 43 percent gain over the third quarter of 2009.
EMC revenues, which came in slightly above its earlier estimates, were aided by strength in its information infrastructure business. EMC said revenues from its information storage subsidiary, RSA Security, and content management and archiving offerings increased 15 percent sequentially in the quarter to $3.5 billion.
EMC chairman and CEO Joe Tucci said the results reflect both an improvement in business conditions and efforts by the company to contain costs. “Aggressive investment in core technology and strategic partnerships during the downturn, combined with heightened operational discipline, leaves EMC stronger than ever financially and intensely focused on our customers,” said Tucci. “We are well positioned to lead the industry’s newest and potentially largest wave of IT, which we and others refer to as cloud computing.”
Tucci said EMC is moving aggressively forward on its vision to help customers build fully virtualized data centers and private cloud computing infrastructures.
On a full year basis, EMC reported consolidated revenue of $14 billion and net income of $1.1 billion, or 55 cents per share. That compared to revenues of $14.9 billion in 2008 and net income of $1.3 billion, or 61 cents per share.
EMC’s results were helped by a strong showing from VMware, which is majority-owned by EMC. VMware, which is headquartered in Palo Alto, reported Monday that its fourth quarter revenues were $608 million, an 18 percent increase over the same quarter in 2008. Net income fell 49 percent, to $56 million, though that decline, which was largely due to increased research and development costs, was smaller than expected.
VMware is the leading player in the market for virtualization technology, which essentially allows one computer or server to do the work of multiple systems. Like EMC, VMware said its business benefited from an improvement in the worldwide economic picture.
“While the economy is slowly recovering, we have improved near-term visibility as customers move forward with their IT investments,” CFO Mark Peek said in a statement. VMware said that this year it expects revenues to be in the range of $2.45 billion to $2.55 billion, an increase of 21 percent to 26 percent over 2009.
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