Updated from 8:40 a.m. ET

The preannouncement season may not be over just yet.

EMC

(EMC)

issued a release Wednesday morning saying that its first-quarter earnings are expected to be 18 cents a share, two pennies below the

Thomson Financial/First Call

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consensus estimate -- a benchmark, it should be noted, that has been falling steadily all year. The company said it expects to report that revenue grew 29% from last year to $2.35 billion.

The reason for the shortfall: Tightened IT budgets. The company did

tip its hand in February that revenue may come down a bit. The stock, off 47% so far this year, finished trading Tuesday at $34.40. It was up $2.01, or 5.8%, at $36.41 in early Wednesday trading.

"Revenues in the first quarter ended up softer than anticipated because of some purchase hesitation from our customers," said EMC CEO and President Joe Tucci. "We found some customers reluctant to spend budgeted IT money, given the abundance of negative economic news."

Putting a brighter spin on things, Chairman Mike Ruettgers added, "We believe that widespread corporate re-budgeting for the year is now mostly complete. We expect that, coming out of the first quarter, most businesses have reduced growth expectations and budgets accordingly.''

But the full-year picture isn't pretty. EMC said it expects its growth rate for 2001 to stay north of 20%, putting the final nail in the coffin of the company's former $12 billion sales target, which would have represented 35% growth. Meanwhile, thanks to the pressure that aggressive pricing will take on profit margins, earnings-per-share will show just "modest" growth for the year. Analysts were expecting EMC to earn 94 cents a share in 2001, up 18% from 2000's 79 cents a share.