EMC reported better-than-expected second quarter results and upped its outlook for the remainder of the year. The company said that IT budgets have stabilized and customers are more confident about their visibility.
The storage giant on Thursday reported net income of $205.2 million, or 10 cents a share, on revenue of $3.26 billion, down 11 percent from a year ago. On a non-GAAP basis, EMC reported earnings of 18 cents a share.
Wall Street was expecting earnings of 16 cents a share on revenue of $3.2 billion.
EMC's outlook was also raised. EMC projected 2009 earnings of 51 cents a share and non-GAAP earnings of 82 cents a share. Wall Street was expecting 78 cents a share of non-GAAP earnings. On the revenue front, EMC projected 2009 sales of $13.8 billion compared to estimates of $13.5 billion. Data Domain will contribute $200 million in revenue for 2009 and will be neutral to non-GAAP earnings. On a net basis, the Data Domain amounts to a less than 2 cents a share impact.
Meanwhile, third quarter revenue will be up 2 percent to 3 percent sequentially excluding Data Domain results. Including Data Domain will result in sequential growth of 4 percent to 5 percent.In a statement, CEO Joe Tucci said that EMC expects the company to generate double-digit revenue growth rates "when IT markets resume to more normal spending rate." For now, EMC will focus on gaining share in the hottest markets---data centers, cloud computing, virtualization and storage.
CFO David Goulden added:
While global conditions remain challenging and our full-year view of declining IT spending remains unchanged, EMC's second-quarter financial performance reflects customers' budget stabilization and improved business predictability.
It was fairly obvious that EMC's quarter would be solid given that VMware delivered a good quarter. EMC is the majority owner of VMware.
Other odds and ends:
- EMC will complete its purchase of Data Domain today.
- EMC ended the quarter with $10 billion in cash and investments.
- Here's the look at EMC by product line. The message: Product revenue is down from a year ago, but improving from the first quarter. Security (RSA primarily) is holding up the best.