EMC cuts forecasts after inventory slip
Storage specialist EMC has cut its projected revenues for 2006, after reporting on Friday that profits for the second quarter were down on last year.
EMC made a net profit of $279m (£152m) in the three months to 30 June, compared with $293m for the same period in 2005. Revenue rose to $2.57bn from $2.34bn, in line with analyst's expectations.
EMC blamed the drop in profits on inventory problems. The company admitted that it had underestimated demand for its latest top-end storage system, the Symmetrix DMX-3, while sales of the previous version, the DMX-2, were below forecasts.
"This issue was a self-induced execution failure on our part. There is no excuse," said chief executive Joe Tucci on Friday, according to Reuters. Tucci explained that many customers had only placed orders late in the quarter, making it hard for EMC to predict demand.
EMC has previously said it would achieve a turnover of between $11.1bn and $11.3bn this year, but has now cut that to just over $10.8bn.
EMC shares dropped 35 cents to $9.63 in early trading on the New York Stock Exchange.
The Symmetrix DMX-3 was launched in January this year, when it was the first storage array to hold a full petabyte of data.