EMC Beats Estimate but Shares Slide on Weak Guidance

NEW YORK (TheStreet) -- EMC (EMC) beat Wall Street's top-line first-quarter estimates, although the storage specialist's shares slipped on weaker-than-expected earnings guidance.

The Hopkinton, Mass.-based company reported revenue of $5.5 billion, an increase of 2% on the same period last year and above analysts' estimates of $5.43 billion.

Excluding items, EMC earned 35 cents a share on net income of $728 million, down from 39 cents a share in the prior year's quarter and net income of $850 million; earnings were in line with Wall Street's estimate. EMC's earnings exceeded the company's guidance by a penny a share.

Investors, however, were underwhelmed by EMC's earnings outlook, pushing the firm's shares down 3.18% to $25.91 in premarket trading on Wednesday.

For fiscal 2014, EMC expects sales of $24.58 billion and earnings of $1.90 a share. Analysts surveyed by Yahoo! Finance are looking for revenue of $24.51 billion and earnings of $1.94 a share.

EMC generated $1.3 billion in operating cash flow and $946 million in free cash flow during the quarter, ending the first quarter with $15.3 billion in cash and investments.

Revenue from EMC's Information Infrastructure business, however, declined 3% year over year, although the company's Emerging Storage revenue climbed 81% over the same period and its Pivotal big data business enjoyed 41% growth. Revenue from EMC's VMware (VMW) subsidiary gained 16% from the prior year's quarter.

The company announced a work force restructuring effort earlier this year.

"EMC is at the threshold of expansive opportunity," wrote EMC Chief Financial Officer David Goulden, in a statement, "While planned business practice changes had a negative impact on year-over-year revenue and EPS growth in the quarter, we are very confident we are on the right track with our Federation model and technologies."

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