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

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.