EMC benefited greatly from the VMware's performance as the latter makes up 20% of the former's reported revenue. But will this trend continue and will VMware have to continue to exceed expectations to carry EMC?
David Goulden, president and COO said:
"For the third quarter, EMC's business continued to grow faster than overall (technology) spending growth and we gained market share in what turned out to be a more cautionary environment than we expected heading into the quarter"
This statement seems to support the company's weaker-than-expected guidance. EMC says it expects full-year earnings of $1.24 to $1.26 per share with adjusted earnings coming in the range of $1.68 to $1.70 per share, slightly below estimates of $1.72. Likewise, the company anticipates revenue of $21.60 billion to $21.75 billion, below analyst' estimates of $22.03 billion.There are a couple of ways to look at this report. The first and obvious way is that it could have been much worst. Even though the company missed estimates, the fact that it continues to grow sales (albeit slower than usual) is a good sign. This also indicates the company remains a dominant power within the sector and is gaining market share on rivals such as NetApp (NTAP) and Hewlett-Packard (HPQ).