EMC's profits in dire condition

So bad they can't see the wood for the trees...

Storage behemoth EMC has seen its profits slashed by three-quarters in second quarter results, way below analysts' expectations. In a conference call to journalists and analysts EMC said the situation was so bad it could offer no detailed guidance as to how it would perform in the next quarter. Offering little hope, it added the economic slowdown, much wider and deeper than it had anticipated, will only get worse. The company reported profits of $109m, down from $429m in the same period last year. Turnover also fell - down 6 per cent to $2.02bn for the quarter. Earnings per share were just $0.05 compared to already lowered estimates of $0.19. The vendor blamed poor economic conditions for causing an estimated $400m worth of business to be postponed by customers. EMC Executive Chairman Mike Ruettgers said the huge earnings miss was due to a number of big deals falling through in the last week: "Normally I can count the number of deals postponed in any quarter on the fingers of one hand. This last week we've had an extraordinary number postponed at the last minute." He tried to reassure listeners by saying he is convinced the deals didn't go to competitors. CEO Joe Tucci added: "As for many companies this quarter, our biggest competitor was the economy. An incredible number of customers delayed orders, and we saw significant decline in our business with telcos, service providers and network equipment makers." Bad sales also reflected a slowdown in the global economy for the first time, with EMEA revenues down 4 per cent. Despite the poor figures EMC remained confident its strategy was right. Tucci said: "We have made many cutbacks to reduce costs, but we refuse to compromise on customer satisfaction. The company is poised to leap ahead again when the economy recovers." For related stories, see
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