Updated from 10:32 a.m. EDT

Storage giant EMC's ( EMC) first-quarter profit has plunged 23%, although the firm says that IT spending is poised for a rebound.

EMC's revenue also slumped 9.2% year over year, coming in at $3.15 billion, below analysts' estimate of $3.25 billion. Adjusted for currency, the Hopkinton, Mass.-based firm's sales slipped 5.7%.

Investors were less than impressed with the first-quarter numbers. Shares of EMC, which competes with IBM ( IBM) and Hewlett-Packard ( HPQ), slipped 1.9% to $12.46 in recent trading.

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EMC reported first-quarter earnings of 10 cents a share on net income of $194.1 million, down from 12 cents a share and $251.6 million in the same period last year. Excluding charges, EMC posted earnings of 16 cents a share on net income of $323.7 million, down from 22 cents and $460.1 million, but in line with analysts' estimate.

In an attempt to combat the tough economy, EMC promised more cost-cuts.

The firm announced measures that will save an additional $100 million in 2009. "We now expect to reduce EMC's 2009 Information Infrastructure costs by approximately $450 million from our 2008 spend, increasing to approximately $500 million in 2010," said EMC's CFO David Goulden in a statement.

During a conference call to discuss the first-quarter results, Tucci explained that he has asked EMC's employees to join management in taking a temporary 5% pay cut. "This, and other actions, will keep us at maximum strength," he said, explaining that this will help avoid a repeat of the firm's January job cuts.

EMC recently took aim at the high end of the storage market with the launch of its V-Max system, which will compete with Hitachi Data Systems' Universal Storage Platform and IBM's Enterprise Storage Server.

Data storage was perceived as one of the more recession-resistant parts of the tech sector, although EMC says that the good times are coming back.

"As we look to the balance of 2009, we believe the global IT spending environment has reached, or is very near, the bottom," said EMC CEO Joe Tucci in a statement. "We expect IT spending to improve in the second half of 2009 as customers will have better budget visibility."

The CEO added that users will also be further into their own restructuring programs at that time, as well as feeling the impact of the U.S. government' stimulus packages. EMC expects global IT spending in the second half of 2009 to be flat compared to the first quarter of the year, but stronger than the first six months of 2009.

Investors will be watching for any corroborating optimism from tech bellwethers, including Microsoft ( MSFT), which reports earnings after the market closes Thursday.

Underlining the extent of the economic slowdown, EMC did not offer guidance for its second quarter.

EMC shares were recently falling 4.1% to $12.18.

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