Hopkinton, Mass. ( TheStreet) -- EMC ( EMC) should offer valuable insight into the state of IT spending when it posts its third-quarter results before the market opens Thursday. The storage giant, which recently hit a 52-week high, is expected to earn 21 cents a share and report revenue of $3.45 billion, according to analysts surveyed by Thomson Reuters. Despite storage's reputation as a recession-busting technology, EMC has not had the easiest of times during the downturn, although its second-quarter results suggested that demand was stabilizing. Barclays recently upgraded the technology hardware sector, citing improving demand for servers and storage, with momentum expected to continue through 2010. Despite analyst bullishness, EMC rival IBM ( IBM) saw its storage revenue plunge 13% during its recent quarterly results, increasing the interest in EMC's numbers. "Our checks suggest that EMC tracked slightly ahead of plan throughout the quarter driven mostly by hardware -- both with Clariion (midrange) and Symmetrix (high-end)," wrote Goldman Sachs analyst David Bailey, in a recent note. The company's hardware revenue, although still pressured by the macro environment, should be up 5% sequentially, he added. The New England firm reported second-quarter revenue of $3.26 billion, down 11% on the prior year's quarter but just above Wall Street's forecast of $3.2 billion. Sales, however, increased 3.4% sequentially. Investors may also gain a hint as to EMC's performance late Wednesday, when its VMware ( VMW) subsidiary posts its own third-quarter results. VMware contributed $455 million to EMC's second-quarter results. Bailey nonetheless feels that EMC's stock may offer limited near-term upside. "We think EMC's strong September-quarter results are already mostly reflected in the shares at current levels," he wrote. "We wouldn't expect the stock to move up on earnings and see the risk/reward with a slight downward bias near term."
The storage giant is also expected to provide an update on its hard-fought acquisition of Data Domain ( DDUP), which saw EMC fend off a spirited challenge from rival NetApp ( NTAP). Other recent EMC purchases include FastScale and Kazeon, which sells legal compliance software. EMC, which recently recruited top Intel ( INTC) exec Pat Gelsinger to be its COO, may also provide an update on its cloud strategy during its third-quarter conference call. EMC shares rose 11 cents, or 0.62%, to $17.83 Wednesday. -- Reported by James Rogers in New York