EMC's Murky Outlook
SAN FRANCISCO -- Data storage gear maker EMC (EMC) will offer another view of the market for tech goods when it reports third-quarter earnings before the markets open on Thursday.
The company's quarterly results will showcase how well EMC has managed the introduction of products for large enterprises and small- and medium-sized businesses.
More broadly, EMC's results -- and commentary of its management -- will add to the mixed signals investors have received about how well tailwinds like global growth have helped counterbalance a slowing U.S. economy and turmoil in the domestic credit and mortgage markets that is wracking its clients in the banking and financial sector.
Analysts' consensus forecast has pegged EMC's earnings at 17 cents a share on a 14% rise in sales to $3.2 billion.Tech investors already appear skittish. On Wednesday, EMC shares were trading down 72 cents, over 3%, to $22.64, as renewed fears of a real estate market downturn caused a selloff in stocks. Shares of EMC's key rival, Network Appliance (NTAP), were trading almost 4.5% lower. Those economic fears surfaced last week when IBM (IBM) blamed a 13% drop in hardware sales on reduced spending by financial services and banking firms, which typically make up Big Blue's largest customer base. While IBM's problems stemmed mostly from sales of servers, investors and analysts have been somewhat more sanguine about data storage equipment. Surging Internet traffic -- especially for videos -- have combined with regulations like Sarbanes-Oxley to increase the need for storage. And the growth of countries around the world has buoyed demand for tech products, especially in emerging economies building Internet and computer networks for universities and businesses.
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