NEW YORK ( TheStreet) -- Weak IT spending continues to be the major inhibitor for many tech companies, including EMC (EMC - Get Report), which are looking to demonstrate growth. Missing on earnings has been the end result.
But the market distributes the punishment evenly and seldom discriminates or cares for the reasons. The challenge for investors is trying to figure out which companies are better positioned to capitalize when IT spending resumes.
Although its recent earnings would suggest otherwise, I believe EMC deserves consideration.
For the period ending in September, EMC reported net income of $626.3 million, or 28 cents per share, on revenues of $5.28 billion. Both EPS and revenue climbed 3% and 6% year over year, respectively. However, both missed analysts' estimates of 42 cents per share on revenue of $5.46 billion, according to FactSet.
Even though this is not a company that misses very often, this quarter's miss was not a surprise. Clearly, it is not immune to the same struggles of weak spending that have affected other tech titans including
. Nonetheless, the company seems to doing pretty well in its core operations as evident by the growth of 3% and 2% in its storage and network storage segments.
Even more impressive was the 5% growth that EMC's high-end storage business produced. But as tends to be the case during tough competitive environments, EMC missed estimates on gross margins as a result of its somewhat lethargic pace in revenue.
If there was one bright side during the quarter, it was with virtualization giant
, which is majority-owned by EMC. VMware reported numbers that topped analysts' estimates as the company continues to grow despite and acquire business despite the economic slowdown. VMware saw 20% revenue growth as sales reached $1.13 billion and reported net income of 70 cents per share, topping estimates of 63 cents.