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EMC beats estimates, sees no slowdown

Data storage giant EMC Corp. (NYSE: EMC) handily beat consensus estimates for earnings and revenue in the fourth quarter. The company reported earnings of $563 million, or 25 cents a share, on revenue of $2.62 billion.

Earnings tracking firm First Call Corp. projected earnings of 23 cents a share on sales of $2.56 billion.

Officials also told Wall Street what it wanted to hear Tuesday. "We do not see a slowdown in the first half for information data storage," said Chairman Mike Ruettgers on a conference call with analysts. EMC maintained that it is confident it will hit its goal of $12 billion in revenue for fiscal 2001.

Ruettgers' statement was welcome news. Analysts said EMC's earnings report would be a key barometer for the data storage industry. In fact, many analysts had worried that slowing information technology growth would ding EMC's outlook.

EMC posted impressive year over year growth. Sales jumped 40 percent from a year ago and earnings increased 47 percent. For fiscal 2000, EMC reported earnings of $1.78 billion, or 79 cents a share, on revenue of $8.87 billion.

For the quarter, EMC garnered 41 percent of its sales abroad, and 39 percent for the year. Gross margins were up to 59.2 percent, compared to 55.1 percent a year ago.

The company said it was gaining market share in its major markets. Chief Financial Officer Bill Teuber said the company will continue to grow sales in the mid-30 percent range in 2001. Gross margins will be in the mid- to high 50 percent range.

According to First Call, EMC is expected to post earnings of $1.02 a share on sales of $11.9 billion. Teuber said the company was comfortable with those targets. "We are firmly committed to our goal of $12 billion in revenue in 2001," he said. >