EMC: 'We expect IT spending to improve'

As the storage giant reports earnings in line with expectations, Chief Executive Joe Tucci is the latest tech executive to call a bottom to the current IT-spending slump.

This was originally posted at ZDNet's Between the Lines.

EMC Chief Executive Joe Tucci on Thursday said the storage giant expects technology spending in the second half of the fiscal year to improve, and it noted that the worst is largely over.

EMC Chief Executive Joe Tucci
EMC Chief Executive Joe Tucci EMC

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 under way.

With these 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, it predicted, 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.

About the author

    Larry Dignan is editor in chief of ZDNet and editorial director of CNET's TechRepublic. He has covered the technology and financial-services industries since 1995.

     

    Join the discussion

    Conversation powered by Livefyre

    Don't Miss
    Hot Products
    Trending on CNET

    HOT ON CNET

    Is your phone battery always at 4 percent?

    These battery packs will give your device the extra juice to power through all of those texts and phone calls.