EMC Beats Estimates as Spending Stabilizes

Storage giant EMC(EMC Quote) beat analysts' second-quarter revenue and profit estimates amid signs that IT spending is starting to stabilize.

The Hopkinton, Mass.-based firm reported revenue of $3.26 billion, down 11% on the same period last year, and just above Wall Street's forecast of $3.2 billion. Sales, however, increased 3.4% sequentially and EMC's VMware(VMW Quote) subsidiary contributed $455 million to second-quarter revenue.

EMC's profit also came in above analysts' expectations. On a non-GAAP basis, the company posted earnings of 18 cents a share on net income of $358.9 million, compared with 24 cents a share and $494.4 million in the same period last year. Analysts polled by Thomson Reuters had expected earnings of 16 cents a share.

The profit and revenue beat pushed EMC's shares up 89 cents, or 6.18%, to $15.30 in pre-market trading.

On a GAAP basis, EMC earned 10 cents a share on net income of $205.2 million, down from 17 cents a share and $360.1 million in the prior year's quarter.

EMC, which recently beat rival NetApp(NTAP Quote) in the battle to acquire de-duplication specialist Data Domain(DDUP Quote), also issued 2009 guidance. The storage specialist expects revenue of $13.8 billion, just above analysts' forecast of $13.5 billion. Third-quarter sales will increase 2% to 3% sequentially excluding revenue from Data Domain, according to EMC.

"This marks another quarter of solid execution," said Joe Tucci, the EMC CEO, in a statement. "When IT markets resume to normal spending rates, we expect EMC will return to generating double-digit growth."