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EMC trounces earnings, revenue expectations

The data storage giant handily beats estimates for the fourth quarter with earnings of $563 million, or 25 cents a share, on revenue of $2.62 billion.

Data storage giant EMC handily beat consensus estimates for earnings and revenue in the fourth quarter.

The Hopkinton, Mass.-based company reported earnings Tuesday of $563 million, or 25 cents a share, on revenue of $2.62 billion. First Call, which tracks earnings, had projected earnings of 23 cents a share on sales of $2.56 billion.

The company also told Wall Street what it wanted to hear Tuesday.

"We do not see a slowdown in the first half for information data storage," chairman Mike Ruettgers said in 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 had 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 crimp EMC's outlook.

But in spite of the good news, shares of the company were down slightly in early trading Tuesday. At midmorning, EMC was down 31 cents to $76.19 on the New York Stock Exchange.

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, which ended Dec. 31, EMC garnered 41 percent of its sales abroad, and for the year, 39 percent. Gross margins were up to 59.2 percent, compared with 55.1 percent a year ago.

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

According to First Call, EMC is expected to post earnings of 23 cents a share on sales of $11.9 billion in 2001. Teuber said the company is comfortable with those targets. "We are firmly committed to our goal of $12 billion in revenue in 2001," he said.