Updated from 9:33 a.m. EDT
SAN FRANCISCO -- Shares of data storage firm EMC (EMC - Get Report) climbed after the company said third-quarter revenue benefited from continued growth -- albeit at a modest pace -- in sales to financial services firms.
The company's comments bolstered views that EMC's core data storage business remains healthy, and lent credibility to Chief Executive Joseph Tucci's view that the company will "definitely exceed" its full-year financial goals.
In recent trading on Thursday, EMC shares were up $1.71, or 7.6%, to $24.24, despite declines in broad market indexes.On a conference call with analysts, Tucci said orders from financial services firms grew modestly despite "an air of caution." The company doesn't break out the amount that different industry segments contribute to its sales, but Toni Sacconaghi, an analyst with Sanford C. Bernstein, estimates that financial services firms account for roughly 10% of EMC's business. Tech purchases from financial services firms have appeared particularly vulnerable to cutbacks because of mounting losses from mortgage-related investments. IBM (IBM), for example, cited credit and mortgage market turmoil as a key factor behind a 13% fall in third-quarter hardware sales. EMC said that its sales momentum stems from efforts to consolidate storage equipment, strengthen backup and recovery capabilities and comply with regulations such as Sarbanes-Oxley that set high standards for data storage and archiving. With these tailwinds at its back, Tucci now expects that EMC will top its full-year earnings target of 64 cents a share on $12.7 billion in revenue.