Updated from 10:30 a.m. ESTStrong demand for hardware and software helped storage giant EMC ( EMC) boost fourth-quarter net income by nearly 46%, the company's sixth consecutive quarter of double-digit profit growth. Total revenue for the quarter was $2.36 billion, 27% higher than the corresponding quarter last year, EMC reported before the opening bell Tuesday. Net income grew 45.6% to $321 million, or 13 cents per diluted share, from $220 million or 9 cents per diluted share, a year ago. Analysts polled by Reuters were expecting a 12-cent profit on sales of $2.28 billion. However, there was some concern that the gross margin of 52% did not reflect the strength of EMC's spate of acquisition in the last two years. Baird analyst Daniel J. Renouard, for example, said he expected an additional 62 basis points, which he called "modestly disappointing." (His company does not have an investment banking relationship with EMC.) The possibility of a disk drive shortage during the first half of the year also apparently worried some investors. As a result, the stock has been trading moderately lower all day; in recent action, shares were off 19 cents, or 1.9%, to $12.65. Core EMC revenue in the fourth quarter of 2004, which excludes revenue related to EMC's Dantz, Documentum, Legato and VMware acquisitions, grew 19% compared with the fourth quarter of 2003. CEO Joe Tucci said "most of the heavy lifting need to integrate the acquisitions is over." Is EMC ready to pause, or is it actively looking for more acquisitions? "I don't have my hunting boots on," Tucci said during an interview. "But if the right opportunity happened to come along, we'd consider it." Looking forward, the Hopkinton, Mass., company expects an EPS profit of 10 cents or 11 cents, with revenue ranging from $2.23 billion to $2.25 billion. Analysts were predicting a profit of 10 cents with revenue of $2.15 billion. Tucci said he believes that IT spending this year will be fairly similar to 2004, meaning a growth of 4% to 5%, but EMC's revenue will grow faster, he said. The company told investors to expect growth of 14% to 16% in 2005. Diluted earnings per share will likely range from 47 cents to 51 cents, he said. A First Call survey was expecting earnings of 49 cents a share on revenue of $9.4 billion.
More from Technology
Netflix Is Out to Show It's 'Part of the Zeitgeist' at Oscars
For Netflix and Amazon, garnering Academy Awards could mean a competitive advantage as streaming services vie for the top creative talent.
Nvidia Is Taking Fresh Steps to Boost its Sales to Gamers - Tech Check
The GPU giant just launched a new mid-range product that has done well in reviews. And it might be prepping a new high-end offering.
Intel: 5G Chips Won't Show Up in Smartphones Until 2020
Intel execs say its 5G modem chips won't appear in consumer 'products in the market' until 2020, sparking questions about the timing of Apple's 5G iPhone.
IBM's Cheap Valuation Is a Great Buying Opportunity
IBM continues to deliver solid results and strong free cash flow. At the same time, its stock is hugely undervalued.
How Big Are Amazon's Shipping Ambitions? Layoffs at XPO May Reveal Clues
Amazon is taking an increasingly aggressive stance in logistics and transportation, as recent reports from delivery giant XPO suggest. But Amazon's ambitions also carry some risks.