EMC: IT spending to fall; Little visibility into 2009
EMC joined the growing list of companies that can't see beyond a quarter. The storage giant said Tuesday that it expects 2009 IT spending "will decline as a percentage in the mid to high single digits compared with 2008." Meanwhile the company couldn't provide an outlook for 2009 due to the many wild cards facing the economy.
At least EMC isn't alone (statement). Few companies are trying to guess what will happen in 2009. That makes a lot of sense. Why disappoint Wall Street when no one has a clue how the economy will do. EMC's child--VMware--also couldn't provide a 2009 outlook. Microsoft and Intel are also in the no visibility club.
EMC's fourth quarter was in line with its previous profit warning. On Jan. 7, EMC cut its outlook and announced 2,400 job cuts. The company reported net income of $288 million, or 14 cents a share, on revenue of $4.02 billion. If you back out restructuring charges and other items, EMC had fourth quarter earnings of $646.8 million, or 32 cents a share.
For the year, EMC reported net income of $1.35 billion, or 64 cents a share, on revenue of $14.88 billion.
In a statement, EMC chief Joe Tucci noted that the company has been through the downturn drill before:
EMC has a firm grasp on what's required to thrive in tough times and emerge even stronger in the next growth cycle. We remain intensely focused on customers' top priorities -- saving money, attaining a faster ROI, reducing risk and preparing for the delivery of next-generation data centers. Finally, we remain committed to investing heavily in research and development to extend our technology lead and maintain rapid product rollout cycles.
Here's EMC's business breakdown:
