NEW YORK (TheStreet) -- EMC (EMC - Get Report) comfortably beat Wall Street's fourth-quarter earnings estimates but the storage giant's shares were slipping on weak guidance and news of work force restructuring.
The Hopkinton, Mass.-based firm reported revenue on Wednesday of $6.7 billion, an increase of 11% from the prior year's quarter. Analysts surveyed by Yahoo! Finance were looking for sales of $6.63 billion.
The revenue hike was fueled by 10% year-over-year growth in the company's Information Storage business and a 73% hike in EMC's Emerging Storage division, which includes its Isilon, Atmos, VPLEX and XtremIO offerings. EMC's Unified Backup and Recovery revenue grew 11%, while its high-end storage business returned to growth.
Excluding items, EMC earned 60 cents a share, also 11% higher than the same period last year and just above Wall Street's forecast of 59 cents a share.EMC's guidance, however, came in below Wall Street's estimates. For its fiscal first quarter, the storage maker said it expects sales of $5.39 billion, well below analysts' forecasts of $5.81 billion. Excluding items, EMC expects earnings of 35 cents a share. Analysts surveyed by Yahoo! Finance expect earnings of 43 cents a share. For the full year, EMC expects revenue of $24.5 billion and earnings, excluding items, of $1.95 a share. Analysts are looking for sales of $24.96 billion and earnings of $2.04 a share. Shares of EMC slipped 3.07% to $24.6 before market open on Wednesday. EMC's management approved a work force restructuring plan on Jan.28, according to a regulatory filing. "The plan consists of a reduction in force which will be substantially completed by the end of the first quarter of 2014 and fully completed by the end of 2014," it said. "The total charge resulting from this plan is expected to be approximately $100 - $120 million, with total cash payments associated with the plan expected to be in the range of $95 to $114 million." During 2013, the company generated operating cash flow of $6.9 billion and free cash flow of $5.5 billion, year-over-year increases of 11% and 10%, respectively. EMC ended 2013 with $17.6 billion in cash and investments. --Written by James Rogers in New York. Follow @jamesjrogers >Contact by Email.
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