Jan. 29 (Bloomberg) -- EMC Corp., the world’s biggest maker of storage computers, fell the most in more than six months after forecasting full-year profit that trailed analysts’ estimates and as VMware Inc., the software maker it mostly owns, said it’s facing a tough first half of the year.
EMC declined 4 percent to $24.18 at the close in New York, for the biggest one-day drop since July 6. The stock gained 17 percent last year, while the Standard & Poor’s 500 Index advanced more than 13 percent. VMware tumbled 22 percent to $77.14, for the steepest single-session decline since July 2008.
VMware yesterday projected sales that missed estimates amid cutbacks from corporate customers and said it will cut 900 jobs, exit some business lines and consolidate facilities. EMC today forecast 2013 earnings of $1.85 a share excluding certain restructuring charges and the amortization of VMware’s software from prior periods. Analysts had estimated $1.90.
The shares are down because of “poor guidance provided by their wayward child VMware,” Brian Freed, an analyst at Wunderlich Securities Inc., said via e-mail. He cut his rating on VMware to hold from buy today.
VMware is the biggest maker of software that lets computers run multiple operating systems.
Sales will be $23.5 billion for 2013, EMC said in a statement. That compared to an average analyst estimate of $23.63 billion.
‘VMware as of yesterday still represents 60 percent of EMC’s value,’’ said Jeffrey Fidacaro, an analyst at Monness Crespi Hardt & Co.
EMC’s fourth-quarter net income rose 4.6 percent to $869.9 million, or 39 cents a share, from $832 million, or 38 cents, a year earlier, the Hopkinton, Massachusetts-based company said. Excluding some costs, profit was 54 cents, beating the 52-cent average of analysts’ estimates compiled by Bloomberg. Sales rose 8.2 percent to $6.03 billion, compared with the $5.98 billion projection.
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