Storage giant EMC delivered a strong first quarter, maintained its outlook and said IT spending looks to be on track for growth of about 3 percent to 4 percent in 2012.
EMC reported first quarter earnings of $587 million, or 27 cents a share, on revenue of $5.09 billion, up 11 percent from a year ago. Non-GAAP earnings checked in at 37 cents a share. Wall Street was expecting earnings of 36 cents a share on revenue of $5.12 billion.
As for the outlook, EMC said it's on the path to meet or exceed its 2012 targets. The company is gunning for annual revenue of $28 billion in 2014. Specifically, EMC said it will deliver at least $22 billion in revenue for 2012 with net income of $2.8 billion, or $1.25 a share. Non-GAAP earnings will be at least $1.70 a share for 2012.
EMC CFO Dave Goulden said the company's product portfolio aims to mesh integration with best of breed technology. He the launch of its VMax system helped the quarter.
However, Goulden added that he expects storage growth rates to return to historical norms. He said:
We're comfortable with how our storage business is trending. After two years of above trend line growth, we expect the high end storage markets to return to the long-term single-digit growth profile we projected for these segments.
Goulden also added that EMC will continue work on its Flash-based storage appliance and automate data tiering.
On a conference call with analysts, CEO Joe Tucci said the company could navigate any IT spending fluctuation. Tucci said:
In Q1, we saw IT spending in our business unfold pretty much as we expected and predicted. Overall IT spending growth was fairly good in the Americas and APJ, as our 11% and 20% year-over-year respective increases demonstrated. In Europe, I believe that overall IT spending growth was at best flat...
We continue to expect that global IT spending growth will be in the 3 to 4% range this year. And for sure, the IT markets for virtualization, cloud computing, information storage, information protection, information security, and for information intelligence and analytics grow faster than the IT average.