EMC's Q1 falls short, customers cautious on IT spending

Summary:"Customers are still being very cautious with their IT spending. For sure most orders are subject to greater scrutiny and many enterprises are now requiring a higher level of executive sign-off," says EMC CEO Joe Tucci.

EMC reported first quarter earnings of $580 million, or 26 cents a share, on revenue of $5.39 billion, up 6 percent from a year ago. Non-GAAP earnings were 39 cents a share.

Wall Street was looking for earnings of 40 cents a share on revenue of $5.42 billion in the first quarter.

Despite the miss, EMC remained confident about its outlook and first quarter results. EMC CEO Joe Tucci said the first quarter was solid and the company is positioned well with its VMware and Pivotal units.

EMC maintained its earnings outlook and said it will generate more than $30 billion in revenue in 2016.

Specifically, EMC said that its revenue for 2013 will be $23.5 billion. Non-GAAP earnings will be $1.85 a share. Wall Street was expecting earnings of $1.86 a share.

On a conference call with analysts, Tucci said IT spending remained cautious. He said:

Overall I was pleased with our results and our execution in Q1. As the quarter came in line with our expectations. That said, we found the bookings flow to be quite back end loaded. In other words, we experienced a high level of hardware and software bookings in March, especially in the last two weeks.

The main reason for the late book this is quarter is that customers are still being very cautious with their IT spending. For sure most orders are subject to greater scrutiny and many enterprises are now requiring a higher level of executive sign-off before they give final approval. Undoubtedly this caution is being fueled by the continuing tide of political and economic uncertainties.

EMC expects IT spending to grow at a 3 percent clip in 2013.

emc042413

 

Topics: Storage, Big Data, Cloud, Data Centers, EMC

About

Larry Dignan is Editor in Chief of ZDNet and SmartPlanet as well as Editorial Director of ZDNet's sister site TechRepublic. He was most recently Executive Editor of News and Blogs at ZDNet. Prior to that he was executive news editor at eWeek and news editor at Baseline. He also served as the East Coast news editor and finance editor at CN... Full Bio

zdnet_core.socialButton.googleLabel Contact Disclosure

Kick off your day with ZDNet's daily email newsletter. It's the freshest tech news and opinion, served hot. Get it.

Related Stories

The best of ZDNet, delivered

You have been successfully signed up. To sign up for more newsletters or to manage your account, visit the Newsletter Subscription Center.
Subscription failed.