EMC Q3 better than expected, 2011 outlook on target

Storage giant EMC reported better-than-expected third quarter earnings and said it was on track to hit its 2011 targets.

EMC reported third quarter earnings of $606 million, or 27 cents a share, on revenue of $4.98 billion, up 18 percent from a year ago. Non-GAAP earnings were 37 cents a share.

Wall Street, which looks at non-GAAP earnings, was looking for earnings of 36 cents a share on revenue of $4.9 billion.

As for the outlook, EMC CFO David Goulden said that the company is on track to meet or beat its 2011 targets. EMC is expecting to deliver non-GAAP earnings of $1.48 a share on revenue of $19.8 billion. Goulden added that EMC aims to gain share and target big data and information management trends.

EMC CEO Joe Tucci said the company is seeing solid demand for its gear and software, which are in the middle of virtualization and hybrid cloud computing trends.

Among the key items in the quarter:

• EMC's information storage business was up 16 percent from a year ago.
• Symmetrix storage revenue was up 7 percent in the third quarter and mid-tier storage products surged 28 percent. RSA revenue was up 16 percent from a year ago.
• EMC's big data portfolio---Isilon, Atmos and Greenplum---saw revenue more than double in the third quarter. That unit was largely built by acquisition.
• U.S. revenue was $2.7 billion, up 16 percent from a year ago. In the third quarter, the U.S. represented 54 percent of EMC's sales. International revenue was up 20 percent from a year ago with Asia Pacific and Japan sales jumping 37 percent in the third quarter.
• Sales in Europe, Middle East and Africa were up 15 percent in the third quarter with Latin America revenue gaining 8 percent.

EMC's earnings come a day after its VMware unit delivered strong results. However, VMware said 2012 will be more difficult given potentially shaky enterprise spending and tough comparisons with a year ago.