EMC CEO Joe Tucci said Thursday that the storage giant expects second half technology spending to improve and noted that the worst is largely over.
Tucci's comments came amid EMC's earnings, which met expectations. In a statement Tucci said:
As we look to the balance of 2009, we believe the global IT spending environment has reached or is very near the bottom. We expect IT spending to improve in the second half of 2009 as customers will have better budget visibility, be further through their own restructuring programs and broader stimulus packages should be underway.
With the comments EMC becomes the latest company to call a bottom. Intel and Nokia are among the others noting that the worst may be over. EMC's "best guess" is that 2009 global IT spending will decline in the "very-high-single-digit to very-low-double-digit range compared with 2008." Second quarter IT spending will be flat with the first quarter and then improve.
EMC reported first quarter net income of $194.1 million, or 10 cents a share, on revenue of $3.15 billion. Non-GAAP net income was $323.7 million, or 16 cents a share, down from $460 million, or 22 cents a share a year ago, but in line with Wall Street estimates.
The company noted that it is aiming to save $100 million in 2009 and it expects to cut its infrastructure costs by $450 million relative to 2008.
Update: To get to that $100 million EMC has asked employees to take a 5 percent pay cut. On a conference call Tucci said:
As a major part of this program, I have sent a letter today to all EMC exempt employees asking them to join management and our board of directors in taking temporary 5% salary pay reductions. I might mention that for the senior management and our board, this cut is on top of the 5% to more than 20% reductions that we already have implemented. This and other actions will keep us at maximum strength for today while ensuring a strong and motivated EMC for tomorrow.