EMC's Q3, outlook disappoint amid 'cautionary environment'

EMC becomes the latest large technology player to indicate that customers are tapping the brakes on IT spending.
Written by Larry Dignan, Contributor

Storage giant EMC reported third quarter earnings that fell short of earnings. The results indicate that even enterprise storage spending---thought to be bulletproof amid big data and virtualization implementations---is hitting some turbulence.

EMC becomes the latest large technology player to indicate that companies were cautious. IBM, HP, Cisco and others have cited a cautious spending. 

The company reported third quarter earnings of $626 million, or 28 cents a share, on revenue of $5.28 billion, up 6 percent from a year ago. Non-GAAP earnings were 40 cents a share, 2 pennies short of Wall Street estimates.

EMC's third quarter earnings were a bit of a shocker considering VMware's results, which are consolidated into parent EMC, were strong. Also: VMware's Q3 solid; Outlook in line as new CFO named

For 2012, EMC said that it would deliver non-GAAP earnings of $1.68 a share to $1.70 a share. Wall Street was expecting $1.72 a share. GAAP earnings for 2012 will be between $1.24 and $1.26 billion. EMC added that 2012 revenue will be between $21.6 billion and $21.75 billion.

EMC CEO Joe Tucci said in a statement that the company is resilient in "a more uncertain global economic environment." He also noted that EMC can cash in on cloud computing, big data and security through a cyclical slowdown.

David Goulden, EMC's operating chief, said that EMC grew faster than IT spending, but saw "what turned out to be a more cautionary environment than we expected heading into the quarter."

EMC saw tepid growth for its key storage systems. Networked storage revenue was up 2 percent from a year ago in the third quarter. High-end systems were up 5 percent. Mid-tier products were flat in the third quarter.

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