|EMC reports its second-quarter results before market open on Wednesday.|
HOPKINTON, Mass. ( TheStreet -- IBM's ( IBM) strong second-quarter results, released Monday, bode well for storage maker EMC ( EMC), which reports its own numbers on Wednesday before market open. Although one of the less glamorous parts of tech, data storage equals dollars these days. IBM noted double-digit growth in storage hardware during the second quarter, and analysts are confident that EMC can deliver when it posts its results.
Merrill Lynch recently surveyed 20 U.S. EMC resellers, and found that sales have been tracking higher than expected. "Respondents expect their EMC sales to grow 7% in 2011, which could be conservative, if spending environment improves," said Merrill analyst Scott Craig, in a note. The survey revealed that EMC's Data Domain offerings, which prevent the same information from being stored twice, is a key area of strength. Merrill also found that interest in EMC's new VNX virtualization system has been solid. The analyst firm expects EMC to report revenue of $4.83 billion and 36 cents a share, compared to Wall Street's consensus of $4.73 billion and 34 cents a share. EMC reported sales of $4.02 billion and earnings of 28 cents a share in the same period last year. "Based on our checks, it appears that the June quarter has tracked well," added Kaushik Roy, an analyst at Merriman Capital, in a note. "We believe EMC will outperform most other large-cap tech names in the next 12-18 months." EMC, which is coming off a record first quarter, is the storage market leader, although rival NetApp ( NTAP) is also winning admirers as enterprises refresh their IT infrastructures. Investors are certainly warming to EMC ahead of its second-quarter results. Shares of the storage behemoth climbed 74 cents, or 2.78%, to $27.38 on Tuesday, outpacing the broader advance in tech stocks that saw the Nasdaq gain 1.97%. In addition to the competitive landscape, EMC is likely to face questions about Apple ( AAPL) during the company's conference call on Wednesday. The firm is rumored to provide some of the storage systems supporting Apple's recently-launched iCloud service, although CEO Joe Tucci has been tight-lipped on this topic. EMC's virtualization subsidiary VMware ( VMW) also reported solid second-quarter results after market close on Tuesday, posting non-GAAP earnings per share of 55 cents on sales of $921 million. Analysts were expecting earnings of 47 cents a share on sales of $873 million. "Our checks suggest the tone of business at VMware remains excellent," explained Pat Walravens, an analyst at JMP Securities, in a note. "We expect enterprises to continue to adopt VMware's solutions in order to virtualize their technology infrastructure." --Written by James Rogers in New York. >To follow the writer on Twitter, go to http://twitter.com/jamesjrogers. >To submit a news tip, send an email to: firstname.lastname@example.org.