EMC beats expectations on high-end storage sales
The computer storage system firm reports that third-quarter earnings rose 21 percent, exceeding analyst expectations as revenues from high-end storage products soared.
Net earnings for the period were $377 million, or 34 cents per share, on sales of $1.88 billion. That compares with earnings of $273 million, or 26 cents per share, on sales of $1.55 billion for the same period in 1998.
Analysts expected EMC to earn 31 cents per share, according to a survey by First Call.
Chief executive Mike Ruettgers attributed the better-than-expected report to an increase in high-end storage sales.
"EMC closed the decade with a fourth quarter that was our most extraordinary ever by any measure," Ruettgers said in a prepared statement.
"This performance was achieved during a quarter in which we completed both the acquisition and successful integration of Data General into EMC…and sold more intelligent storage to the rapidly growing e-business community than in the first three quarters of 1999 combined."
In early trading, shares fell $5.50 or 4.5 percent to $114.50. The earnings report was issued before the opening of regular trading. Shares rose yesterday in anticipation of the report, and had more than doubled this past year.
The quarter?s results include operations of Data General, which EMC acquired on Oct. 12, but exclude a one-time acquisition charge of 15 cents per share.
The one-time charge included $208 million in one-time restructuring charges and another $16 million in related charges. Net income was $207 million, or 19 cents per share, including charges.
Storage revenue rose 27 percent over the fourth quarter of 1998 to $1.66 billion. The company said demand for software and continued success in selling to the storage area network (SAN) and network attached storage (NAS) segments helped boost revenue.
Software revenue, representing 17 percent of EMC?s storage revenue, was $281 million, a 71 percent increase over the year-ago quarter.
For the year, revenue totaled $6.72 billion, a 24 percent increase over 1998 figures. Net income rose 50 percent for the year to $1.18 billion, or $1.07 per share.
Software revenue jumped 85 percent for the year to $822 million.