EMC Profits Nearly Double
On the heels of announcing its $1.7 billion acquisition of Documentum Inc. this week, storage giant EMC Corp. today reported $1.51 billion in revenue for the third quarter of 2003, with $159 million in profit.
Revenue is up slightly from $1.48 billion last quarter and $1.26 billion a year ago, while income is nearly double the $82 million of last quarter and far exceeding the $21 million of a year ago.
"We are pleased that our third-quarter results reflect strong customer acceptance of EMCs comprehensive lineup of automated networked storage solutions. We are on track to achieve double-digit growth for the year, which not many large technology companies will do," CEO and President Joe Tucci said in a prepared statement.
Industry watchers consider the Documentum pickup a surprise, as EMC was widely expected to buy either a performance or systems management company. Regarding the decision, "With Tuesdays announcement of our agreement to acquire Documentum and the pending completion of our acquisition of [Legato Systems Inc.], two complementary leaders in information management software, we are making the strategic moves necessary to enable our customers to manage all of their information according to its value to the business at every stage of its life, at the lowest total cost," said Tucci, in Hopkinton, Mass.
Besides the double-digit growth in hardware and services, EMCs software revenue grew to 23 percent of total revenue, officials said, and is expected to be 27 percent by the end of 2004. The final goal is 30 percent, officials have said, which they repeated today.
All the while, EMC later this month is expected to close its other major acquisition, the $1.3 billion deal for Mountain View, Calif.-based backup software maker Legato. Customers reacted with cautious optimism to that deal, especially as both EMC and Legato promised independent road maps.
EMCs other highlights in the busy quarter included a promise to lower its prices, upgrades to its high-end Symmetrix DMX and its Celerra network-attached storage (NAS) products, tape plans, new software for its midrange Clariion storage products, and an expanded partnership with BMC Software Inc. Also, EMC last week pledged to share programming interfaces with IBM, but so far has actually only dealt in mainframe software, officials noted.
Revenue in the next quarter is expected to be between $1.74 million and $1.78 billion, officials said.