EMC (EMC - Get Report) said Monday that second-quarter results will fall short of prior expectations, due in part to its inability to fulfill customer demand for its latest-generation storage platform.
EMC said second-quarter revenue was about $2.575 billion, an increase of approximately 10% from a year earlier, but below its previous projection of at least $2.66 billion.
In addition, the company now expects to earn 12 cents a share, which includes a 2-cent-a-share charge for option expense, a 2-cent amortization expense, and a 1-cent tax benefit. EMC had previously expected it would earn 13 cents a share, including items.
Shares of EMC were recently off 33 cents, or 3%, to $10.85.EMC said the primary culprits included a faster-than-anticipated move by customers to its new EMC Symmetrix DMX-3 platform and later-than-expected orders from customers. While product bookings finished strongly for the quarter, up 14% from the same period a year ago, the volume and mix of orders at the end of the quarter prevented EMC from fulfilling all of the customer demand for its Symmetrix systems, the company said in a statement. Joe Tucci, EMC's chairman, president and CEO, said, "We received more customer orders than we anticipated very late in June for our new EMC Symmetrix DMX-3 systems, and fewer than anticipated customer orders for our prior-generation Symmetrix DMX-2 systems, and we therefore did not have the right inventory mix to fulfill demand as we closed the quarter. "We ended the quarter with healthy margins on our bookings and a backlog that was approximately $100 million larger than planned," Tucci added. "If we had been able to fulfill the strong Symmetrix DMX-3 demand and some of the other customer orders had come in a bit earlier, we certainly would have been able to meet our financial targets."