Thursday, April 18, 2024

EMC Earnings Fail to Meet Expectations

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Storage and data security vendor EMC has reported increases in quarterly income and revenue, but it failed to meet analyst expectations. The company cut its annual financial projections and warned that many of its customers are holding off on large IT purchases.

Chris Preimesberger at eWeek wrote, “Data storage and security provider EMC still is piling up consecutive profitable quarters, but its double-digit profitability days are behind it—at least for the time being. The Hopkinton, Mass.-based company reported Oct. 24 that its third-quarter net income totaled $626.3 million, up 3 percent from the year-ago period. Revenue increased 6 percent to $5.28 billion for the three-month period.”

Dina Bass and Ryan Faughnder from Bloomberg BusinessWeek added, “EMC Corp. (EMC), the world’s biggest maker of storage computers, cut its sales forecast for the year and posted earnings that missed estimates as a weak economy prompted corporate customers to curb spending. Sales this year will advance to $21.6 billion to $21.75 billion, the Hopkinton, Massachusetts-based company said today in a statement. In July, it projected sales of $22 billion. Third-quarter profit excluding some items was 40 cents a share, missing the 42-cent average of analysts’ estimates (EMC) compiled by Bloomberg.”

According to Larry Dignan from ZDNet, “EMC CEO Joe Tucci said in a statement that the company is resilient in ‘a more uncertain global economic environment.’ He also noted that EMC can cash in on cloud computing, big data and security through a cyclical slowdown. David Goulden, EMC’s operating chief, said that EMC grew faster than IT spending, but saw ‘what turned out to be a more cautionary environment than we expected heading into the quarter.'”

All Things D’s Arik Hesseldahl noted, “EMC is just the latest of the large tech companies to report disappointing results for the quarter. Microsoft, Intel and IBM have all been struggling with various ends of a generalized cutback in IT spending taking place against the backdrop of a weakening world economy.”

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