EMC Posts Loss, Lower Revenue

Updated from 8:30 a.m. EDT

EMC

(EMC)

reported another quarterly loss on falling revenue, but the company's results came in ahead of expectations. The shares rose along with those of

Storage Networks

(STOR) - Get Report

, which posted a narrowed loss on higher revenues.

EMC said its first-quarter pro forma loss was $97 million, or 4 cents a share, compared with net income of $399 million, or 18 cents a share, in the year-ago period. The results exclude the effects of a $28 million after-tax reversal of a third-quarter 2001 restructuring charge and came in slightly better than the consensus analyst estimate, which called for a loss of 5 cents a share, according to Thomson Financial/First Call.

Quarterly revenue continued to decline, falling 14% from fourth-quarter 2001 to $1.3 billion, in line with the consensus estimate. In the year-ago quarter, EMC saw revenue of $2.3 billion.

In a press release, the company said the IT spending slump continued throughout the quarter, as customers focused on improving existing infrastructures rather than beginning major new IT projects. The company has instituted major cost-cutting measures and has lowered its break-even point by $200 million in the last nine months.

EMC offered no future guidance at this time.

Shares of EMC reacted positively to the news, moving up 3.4% to $10.75 in Instinet premarket trading after closing at $10.40 Wednesday.

Waltham, Mass.,-based Storage Networks reported a first-quarter loss of $5.4 million, or 5 cents a share, compared with a loss of $32.9 million, or 34 cents a share, the previous year. Revenues rose to $31.6 million from $27.1 million in the first quarter of 2001. Analysts, on average, had expected the company to post a loss of 14 cents a share. The shares were up 13% on Instinet to $3.25 each.