Updated from 8:27 a.m. EDT

HOPKINTON, Mass. ( TheStreet) -- EMC ( EMC) beat analysts' estimates in its third-quarter results, buoyed by cost-cutting efforts and an a more confident IT spending climate.

The storage maker reported revenue of $3.52 billion, down 5% on the same period last year, but above analysts' projection of $3.45 billion. EMC's sales, however, increased 8% sequentially, ahead of the company's own estimate of 4% to 5% growth.

Excluding items, EMC earned 23 cents a share on net income of $480.3 million, down from 25 cents a share and net income of $528 million in the prior year's quarter. Analysts surveyed by Thomson Reuters had expected earnings of 21 cents a share.

"Customers are signaling more comfort spending their IT budgets, which gives EMC confidence in our ability to perform well and achieve our full-year 2009 targets," said EMC CEO Joe Tucci, in a statement. The company also made further progress improving its cost structure, he added.

EMC's cost-reduction efforts are expected to generate savings of $500 million in 2010 compared to 2008, according to the company's statement.

Investors were nonetheless underwhelmed by EMC's numbers. The company's shares fell 31 cents, or 1.77%, to $17.20 shortly after market open as the Nasdaq dipped 0.61%.

On a GAAP basis, EMC earned 14 cents a share on net income of $298.2 million, down from 20 cents a share and $411 million in the prior year's quarter. Tucci acknowledged that his firm is operating in a still challenging economic climate, but struck a confident tone.

"We are strategically aligned with the major technology shifts and well positioned to play a pivotal role in the IT industry for the next decade," he said, in his statement.

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