Storage King EMC Beats the Street
Updated with comments from EMC CEO Joe Tucci and stock buyback information.
HOPKINTON, Mass. (
) --
EMC's
(EMC)
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
Related Stories:
>>EMC: The Storage Sector's Benchmark
>>Cisco, EMC, VMware: Cloud's Three Amigos
>>Six Top Tech Trends for 2010
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