EMC First-Quarter Earnings Advances 23% on Storage Sales
EMC Corp. (EMC), the world’s biggest maker of storage computers, said first-quarter profit rose 23 percent as companies housed increasing volumes of data and purchased more software from majority-owned VMware Inc. (VMW)
Net income advanced to $586.8 million, or 27 cents a share, from $477.1 million, or 21 cents, a year earlier, the Hopkinton, Massachusetts-based company said today in a statement. Excluding some items, profit was 37 cents, compared with the 36-cent average of analysts’ estimates compiled by Bloomberg.
EMC is benefiting as customers buy more of its storage software, including products from the Isilon unit it acquired in 2010 in its biggest-ever acquisition, Alex Kurtz, an analyst at Sterne Agee, said in a note last week. EMC said it will “meet or potentially exceed” its prior full-year 2012 forecasts for revenue and profit.
“Investors had hoped for a potential raise,” in the 2012 forecast, said Mark Moskowitz, an analyst at JPMorgan & Chase Co. in San Francisco, in a report today. “No change to outlook could be a jump ball.”
EMC’s shares fell 3.7 percent to $28.07 at 9:56 a.m. in New York, after earlier touching $27.86 for the biggest decline since Dec. 21 They had risen 35 percent this year before today.
The company in January forecast of full-year 2012 revenue of $22 billion and profit excluding some items of $1.70 a share. That compares with an average analyst estimate of $22.2 billion and profit of $1.75 a share, according to data compiled by Bloomberg.
EMC’s results in the quarter were also helped by corporate spending on VMware’s virtualization software to cut costs by putting multiple applications on a single server computer.
VMware, the biggest maker of software that lets computers run multiple operating systems, yesterday reported profit of 66 cents, excluding some items, exceeding the 60-cent average estimate. Sales rose to $1.06 billion from $843.7 million, topping the $1.03 billion average prediction.
VMWare’s shares rose 6.1 percent to $118.03. The stock advanced 34 percent this year before today.
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