NEW YORK (
(EMC) investors are surely disappointed. With only moderate improvements expected in enterprise IT spending, 2014 may not pan out the way they imagined.
This really chafes coming off a 2013 that saw the stock underperform a perennial storage laggard like Hewlett-Packard (HPQ).
EMC is still the clear-cut leader in the storage business among rivals like NetApp (NTAP) and IBM (IBM). Despite a strong history of dominance, the Street assumed EMC was immune to poor macro conditions. That's simply not the case.
The good news is that it's still early. Based on the results from rival enterprise powers like Oracle
(ORCL) and Cisco
(CSCO), EMC is not alone in its misery. (That's not meant to be an endorsement.)
A distinction needs to be made with companies that are known for self-inflicted wounds. The idea that EMC is losing its hold in the storage sector, despite its fourth-quarter beat in both revenue and profits, seems overdone.
EMC posted fourth-quarter revenues of $6.68 billion, good enough for a 1% beat, according to some estimates. Admittedly, 11% year-over-year growth is about 5% shy of what EMC has been accustomed to.Amid the growth obsession, on a segmental basis, the Street discounted how strong EMC is actually performing in its bread-and-butter storage business. Management accelerated growth 10% year over year. Even more impressive was the 73% year-over-year surge in the company's Emerging Storage business. The RSA Information Security segment and Unified and Backup Recovery business are also producing double digit successes.
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