The firm also lowered 2015 earnings estimates to $1.86 from $1.91 per share, with 2016 EPS estimates reduced to $2.11 from $2.22.
EMC is a service provider that develops, delivers and supports IT information infrastructure and virtual infrastructure technologies and solutions.
VAR survey feedback on EMC continued to be negative that 49% of respondents think EMC's integration of VCE, a joint-partnership by VMware (VMW), Cisco Systems (CSCO), and EMC, is not having a positive impact on future purchases of VCE equipment, Jefferies noted.
While the firm is cautious on EMC into second quarter results driven by the survey and currency, analysts remain positive on EMC's new products.
"We still like EMC's position in next-generation Storage such as XtremIO, Isilon, DSSD, and hyper-converged storage and believe the company benefits from very low expectations," Jefferies analysts said.
Shares of EMC are higher, up 0.26% to $25.27 in mid-morning trading on Friday.
Separately, TheStreet Ratings team rates EMC CORP/MA as a Hold with a ratings score of C+. TheStreet Ratings Team has this to say about their recommendation:
"We rate EMC CORP/MA (EMC) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and expanding profit margins. However, as a counter to these strengths, we also find weaknesses including a generally disappointing performance in the stock itself, deteriorating net income and weak operating cash flow."
Highlights from the analysis by TheStreet Ratings Team goes as follows:
- The revenue growth significantly trails the industry average of 32.9%. Since the same quarter one year prior, revenues slightly increased by 2.4%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
- Although EMC's debt-to-equity ratio of 0.27 is very low, it is currently higher than that of the industry average. Although the company had a strong debt-to-equity ratio, its quick ratio of 0.90 is somewhat weak and could be cause for future problems.
- The gross profit margin for EMC CORP/MA is rather high; currently it is at 67.22%. Regardless of EMC's high profit margin, it has managed to decrease from the same period last year. Despite the mixed results of the gross profit margin, EMC's net profit margin of 4.48% is significantly lower than the industry average.
- Net operating cash flow has decreased to $1,080.00 million or 19.28% when compared to the same quarter last year. In addition, when comparing to the industry average, the firm's growth rate is much lower.
- In its most recent trading session, EMC has closed at a price level that was not very different from its closing price of one year earlier. This is probably due to its weak earnings growth as well as other mixed factors. Looking ahead, we do not see anything in this company's numbers that would change the one-year trend. It was down over the last twelve months; and it could be down again in the next twelve. Naturally, a bull or bear market could sway the movement of this stock.
- You can view the full analysis from the report here: EMC Ratings Report