EMC Profit Meets Analyst Estimates as Customers Spend on StorageDina Bass
EMC Corp., the world’s biggest maker of storage computers, reported second-quarter earnings that met analysts’ estimates as customers bought new machines to handle surging volumes of data.
Profit before some costs was 42 cents a share, the Hopkinton, Massachusetts-based company said today in a statement. That matched the average analysts’ estimate, according to data compiled by Bloomberg. Sales also met analyst estimates, with $5.61 billion reported.
EMC is benefiting as customers invest in new equipment to run Web-based applications and store reams of digital content. It also got a boost from increased contract renewals at VMware Inc., the software maker that is majority-owned by EMC. Sales growth is likely to accelerate in the second half of the year, said Abhey Lamba, an analyst at Mizuho Securities USA Inc. who recommends buying the shares.
EMC plans to buy back $3.5 billion in stock this year and in the first half of next year.
EMC shares rose less than 1 percent to $25.33 at yesterday’s close in New York. The shares are little changed this year, while the Standard & Poor’s 500 Index has gained 19 percent.
EMC Chief Financial Officer David Goulden said in March that the company will boost revenue by at least 8 percent a year and profit will rise 10 percent annually through 2016 as market share increases. Sales will exceed $30 billion in 2016, Goulden said at the time.
VMware, a Palo Alto, California-based maker of software that lets computers runs multiple operating systems, yesterday reported profit and sales that surpassed analysts’ estimates as customers began renewing multiyear contracts.