EMC CEO Joe Tucci and CFO David Goulden's conference call comments have been added to this story.
HOPKINTON, Mass. (TheStreet) -- Proving that data equals dollars, storage giant EMC (EMC) posted record second-quarter results before market open Wednesday. The company also raised 2011 guidance, due to positive notes associated with its VMware (VMW) virtualization subsidiary.
EMC racked up revenue of $4.85 billion, up from $4.02 billion in the same period last year, and a shade above analysts' estimate of $4.85 billion.
Excluding items, EMC earned 35 cents a share, compared to 28 cents a share in the prior year's quarter. Analysts had forecast earnings of 35 cents a share.Investors welcomed the numbers and raised outlook, pushing EMC's shares up 54 cents, or 1.97%, to $27.92. "Revenue growth improved from Q1 across all of our reported segments," said David Goulden, the EMC CFO, during a conference call before market open. "These results are further evidence that our strategy is on target." EMC's core information storage business enjoyed double-digit revenue growth during the second quarter, with sales increasing 19% year-over-year. Revenue from the company's high-end Symmetrix systems grew 15% over the same period, with sales of EMC's mid-tier offerings climbing 27%. VMware, which is majority-owned by EMC, also helped lift the storage firm's numbers. The software maker reported strong second-quarter numbers after market close Tuesday, and EMC noted its VMware revenue climbed 37% year-over-year. Speaking during the conference call, EMC CEO Joe Tucci reiterated his prediction that IT spending will grow between 5% and 7% in 2011. Tucci, however, added that sales of EMC and VMware's products will grow "substantially faster" than that rate, fueling the company's raised outlook. EMC raised its guidance for fiscal 2011 early on Wednesday, projecting revenue of $19.8 billion, compared to its prior estimate of $19.6 billion. Excluding items, the NetApp (NTAP) and HP (HPQ) rival expects earnings of $1.48 a share, up from its previous forecast of $1.46 a share. EMC also expects to purchase $1.5 billion of the company's stock in 2011, according to a statement released before market open. Revenue from EMC's RSA division, which was the victim of a hacking attack earlier this year, grew 13% year-over-year. Goulden explained that EMC recorded a $66 million charge in the second-quarter related to the attack, as RSA ramped up its "remediation" efforts, such as transaction monitoring for customers. Despite the attack, RSA still saw significant revenue in its SecurID business, according to Goulden, who said that one financial institution placed a $900,000 order for the authentication technology. EMC also offered some much-needed good news for beleaguered networking giant Cisco (CSCO), courtesy of the companies' VCE partnership, which also includes VMware. Aimed at firms looking to quickly build out their cloud infrastructure, the pact centers on pre-packaged blocks of hardware and software, dubbed Vblocks. "Our joint venture with Cisco, VCE, continues to grow in both customer interest and relevance," said Tucci. "We expect Vblock sales to hit the billion dollar run rate in the next several quarters." --Written by James Rogers in New York. >To follow the writer on Twitter, go to http://twitter.com/jamesjrogers. >To submit a news tip, send an email to: firstname.lastname@example.org.
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