EMC cuts 2015 outlook, says customers wary
EMC on Wednesday cut its 2015 outlook and said that customers were coming "more conservative around refreshing their traditional infrastructures."
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Aside from currency and geo-political concerns, enterprises are also looking at digital strategies that more often than not revolve around cloud computing. For a company like EMC, which relies on traditional storage for most of its revenue, that IT transformation to the cloud squeezes revenue.
EMC CEO Joe Tucci said:
While pleased with many aspects of the second quarter, especially with the market acceptance and rapid growth of our newer products, we also saw customers become more conservative around refreshing their traditional infrastructures as they plan their IT transformations. We also saw ongoing geo-political factors in China and Russia.
Tucci reiterated that the company's federation strategy, focus on big data and hybrid cloud services will pay off.
Specifically, EMC projected non-GAAP 2015 earnings of $1.87 a share on revenue of $25.2 billion. Wall Street was looking for $1.91 a share on revenue of $25.65 billion.
For the second quarter, EMC reported earnings of $487 million, or 25 cents a share, on revenue of $6 billion, up 2 percent from a year ago. Non-GAAP earnings for the second quarter were 43 cents a share.
EMC's information infrastructure unit saw revenue growth of 1 percent from a year ago and 6 percent in constant currency. EMC's emerging storage revenue, which is led by its XtremIO flash arrays, saw sales growth of 49 percent.
The company's Pivotal big data business saw revenue gains of 18 percent in the quarter. Also see: VMware satisfies Q2 expectations, sales grow 10 percent