HOPKINTON, Mass. (
beat Wall Street's estimates with its fourth-quarter earnings, released before market open on Tuesday. The company is reaping the benefits of robust enterprise IT spending.
The storage maker brought in revenue of $4.9 billion, a 19% hike on the same period last year and above the consensus estimate of $4.78 billion. Excluding items, EMC earned 42 cents a share, up 27% on the prior year's quarter. Analysts surveyed by Thomson Reuters had forecast earnings of 41 cents a share.
In a statement released before market open, EMC CEO Joe Tucci said that 2010 was the best year in the company's history, marked by rapid growth and market share gains.
EMC, which competes with
, also put out healthy guidance, predicting 2011 revenue of $19.6 billion, well above analysts' forecast of $16.91 billion.
"We believe the company's better-than-expected initial guidance range for 2011 on both the top and bottom line is a positive indicator for EMC as well as an improving IT spending environment in the field," said Daniel Ives, an analyst at FBR Capital Markets, in a note released on Tuesday.
Cited as one of the firms most likely to enjoy
, EMC enjoyed strong demand for its high-end Symmetrix storage system during the fourth quarter, with revenue increasing 19% compared to the same period last year. Revenue from the firm's RSA security business and subsidiary
, climbed 28% and 38%, respectively.
Shares of EMC, however, were weighed down on Tuesday following
, which were released after market close on Monday.
Despite posting impressive sales and earnings, VMware's stock took a pounding after the virtualization specialist said that its operating margin will remain flat in 2011. Investors responded negatively, and VMware shares were down $4.90, or 5.59%, at $82.83 shortly after market open on Tuesday.
EMC's stock was also down, falling 28 cents, or 1.17%, to $23.55, as the Nasdaq dipped 0.48%.
FBR's Ives nonetheless maintained his market outperform rating on EMC, pointing to a positive contribution from VMware. "While storage is a mature industry, the move toward virtualization within the data center puts EMC in the driver's seat to take advantage of this next-generation technology shift," he said.
Virtualization, which lets users make virtual versions of their hardware and software, has been one of the key technology trends of recent years, as companies look to consolidate their data centers and reduce their IT gear.
--Written by James Rogers in New York.
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