EMC Unencumbered by Downturn, Reports Another Record Quarter

By Chris Preimesberger  |  Posted 2008-10-22 Print this article Print

EMC, a $23.5 billion (market cap) company, takes pride in the fact that in the 80 countries in which it does business, it has notched 21 consecutive quarters of double-digit, year-over-year revenue growth. It is the world's largest external disk storage supplier, thanks largely to the widespread sales of its Symmetrix and Clariion enterprise systems over the last 15 years.

Despite the nosedive in the overall U.S. economy during the last month of the quarter, data storage giant EMC posted yet another exemplary financial report Oct. 22, recording its 21st consecutive quarter of double-digit, year-over-year revenue growth.

The company did advise, however, that it does believe overall IT spending will slow down during the next 12 to 18 months and that it expects its profit margins to narrow.

EMC's total consolidated revenue for the third quarter of 2008 was $3.7 billion, an increase of 13 percent over the $3.3 billion reported for the third quarter of 2007.

Third-quarter GAAP net income was $411 million. Third-quarter non-GAAP net income was $528 million, or $0.25 per diluted share, 14 percent higher than a year ago.

EMC's profit was 17 percent below year-ago earnings of $492.9 million, or 23 cents per share. However, last year's figures were boosted by EMC's one-time sale of 6 million shares -- about 5 percent of the 89 percent it owned-- in virtualization software vendor VMware to Cisco Systems.

"We're all going through a little tough patch right now, but we're certainly hoping that things won't get too, too terrible," EMC Executive Vice President and Chief Financial Officer David Goulden told a conference call of journalists and analysts.

"We are fortunate that we're in a business where there are quick ROIs, and surveys show that even in tough times, our customers know that these are areas in which they need to spend," EMC President/CEO and Chairman Joe Tucci said during the same call.

Even in the current volatile U.S. macroeconomy, EMC's prospects remain solid-at least for the short term and likely for the longer term. Analysts report that the volume of personal and business data continues to rocket skyward at 60 to 70 percent growth per year, with little or no chance of a slowdown; all that information has to be stored somewhere, and EMC is the world leader in storing it in external disk drives.

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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