EMC Profits Fall 43%

By Chris Preimesberger  |  Posted 2009-07-23 Print this article Print

Storage giant EMC's earnings dropped to $205.2 million from $360.1 million in second-quarter 2008, EMC reports. Overall income was down 11 percent to $3.26 billion. However, CEO Joe Tucci is optimistic, saying he believes a return to higher numbers may not be far away.

Storage giant EMC, which had enjoyed double-digit profits for 21 quarters up until this year, reported July 23 that it lost ground in the second quarter of 2009 as its profit fell 43 percent from a year ago.

The company's virtualization subsidiary, VMware, reported a 36 percent drop in profits July 22. However, executives from both companies were optimistic, saying they believe a return to higher numbers may not be far away.

EMC's earnings dropped to $205.2 million, or 10 cents per share, from $360.1 million, or 17 cents a share, in the second quarter of 2008. Overall income was down 11 percent to $3.26 billion.

Revenue from VMware added $455 million to EMC's total. As VMware execs had said a day before, EMC CEO Joe Tucci said July 23 he believes that market stabilization may be nearer than many people think.

"When IT markets resume to more normal spending rates, we expect EMC will return to generating double-digit revenue growth," Tucci told a conference call of analysts and journalists.

But in offering some guidance on the company's prospects, EMC signaled that the tech market is at least returning to more predictable conditions.

"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," EMC Chief Financial Officer David Goulden said during the conference call.

"We now have better visibility and more confidence in the second half of 2009," Goulden said.

In its 2009 guidance, EMC forecast revenue of $13.8 billion, including its pending $2.2 billion acquisition of Data Domain. Thomson Reuters analysts projected 78 cents per share and $13.49 billion in revenue, Reuters reported.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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