Storage King EMC Beats the Street

Storage stalwart EMC beats both its own and analysts' fourth-quarter estimates, says that the worst of the recession is behind it.
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Updated with comments from EMC CEO Joe Tucci and stock buyback information.

HOPKINTON, Mass. (

TheStreet

) --

EMC's

(EMC)

fourth-quarter

results came in above both its own and analysts' estimates and the storage maker said that the worst of the recession is now behind it.

The company reported revenue of $4.1 billion before market open, up from $4.02 billion in the same period last year and just above its own estimate of $4 billion. Analysts surveyed by Thomson Reuters had expected revenue of $4.03 billion.

Excluding items, EMC earned 33 cents a share, up from 32 cents in the prior year's quarter and above the company's own outlook of 30 cents a share. Wall Street had predicted earnings of 30 cents a share.

EMC, which competes with

NetApp

(NTAP) - Get Report

and

IBM

(IBM) - Get Report

, is the dominant force in the storage market, and seen as a key indicator for the state of

corporate IT spending

.

Like many tech heavyweights, EMC did not

easily float

through the economic downturn, but the company says it is clearly emerging from the recession.

"While 2009 was a tough year, EMC achieved a lot of good things and exited the year in a good position," said David Goulden, EMC's CFO, during a conference call to discuss the results. "While there is still uncertainty, we do expect 2010 to be better than 2009."

Specifically, Goulden forecast IT spending to grow 3% to 5% in 2010.

EMC's revenue constituted a fourth-quarter record and was up 17% sequentially. Earnings climbed 43% over the third quarter.

For the full year, EMC posted revenue of $14 billion, down from $14.88 billion in the prior year but above analysts' estimate of $13.95 billion. Revenue from EMC's Information Infrastructure business, which includes storage, content management, archiving and the company's RSA Security division, accounted for $12 billion of the firm's 2009 revenue. EMC's virtualization subsidiary

VMware

(VMW) - Get Report

, which posted its own fourth-quarter results after market close on Monday, contributed $2 billion to 2009 revenue.

Excluding items, EMC earned 90 cents a share for the full year, compared to $1.04 a share in fiscal 2008. Analysts surveyed by Thomson Reuters had forecast full-year earnings of 88 cents a share.

The firm expects to generate sales of $16 billion in 2010, above analysts' estimate of $15.45 billion.

"Looking forward into 2010, we expect the economic recovery to continue," said EMC CEO Joe Tucci, during the company's fourth-quarter conference call. "The number one hardware spending priority for CIOs in 2010 is storage."

Demand for security and virtualization products, however, will grow from the mid-teens to low twenties in percentage terms, according to Tucci.

EMC also announced a $1 billion stock repurchase program for 2010.

-- Reported by James Rogers in New York

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>>Cisco, EMC, VMware: Cloud's Three Amigos

>>Six Top Tech Trends for 2010

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