EMC Reports 28 Percent Jump in Q3 Profits, Expects Slower 2012
EMC's newly refreshed enterprise storage line, featuring 41 new products launched in the last 18 months, apparently is also refreshing the company's revenue and profit levels.
The huge storage, security and cloud infrastructure provider continues to file impressive quarterly reports, posting record third-quarter results Oct. 18 that included a 28 percent jump in profits year-over-year.
Hopkinton, Mass.-based EMC reported third-quarter consolidated revenue at $4.98 billion, an increase of 18 percent from the same period a year ago. Net income for the quarter was $606 million.
On Track to Near $20 Billion in 2011
CFO David Goulden told listeners during a conference call that the company expects to bring in just slightly short of $20 billion ($19.8 billion, a record) for the 2011 calendar year.
Revenue from EMC's Information Storage business increased 16 percent overall year-over-year. Revenue from the company's high-end Symmetrix storage portfolio increased 7 percent from the year-ago quarter, and the mid-tier storage products-led by new sales of the VNX and VNXe arrays-grew revenue 28 percent year-over-year.
Revenue from VMware, majority-owned by EMC, increased 32 percent, and revenue from EMC's RSA Information Security business grew 16 percent year-over-year.
Goulden said revenue from EMC's portfolio of "big data" hardware and software packages, which includes EMC Isilon, EMC Atmos and EMC Greenplum, more than doubled year-over-year.
Goulden also said that VCE, the Virtual Computing Environment company formed by Cisco and EMC with investments from VMware and Intel, is "gaining momentum as customer demand increased for best-of-breed converged infrastructure through the Vblock Infrastructure Platform."
2012 Will Be Slower but Steady
EMC, like VMware said in its quarterly report on Oct. 17, expects IT spending to slow somewhat in 2012, meaning the growth margins will still be significant-just slightly less than in 2011.
"Customers are continuing to scrutinize very carefully their IT buys," CEO and President Joe Tucci said on the call. "Even so, we expect that IT spending in Q4 will represent a meaningful increase, but perhaps a tick below a normal Q3 to Q4 increase.
"I have three beliefs about 2012: First, we expect that there will be growth in global IT spending next year, but this growth will be somewhat lower than what we are seeing this year. Second, we are confident that interest and investment in the cloud, big data and security will remain top IT spending priorities.
"Third, we expect EMC to continue to gain share in our markets, therefore growing significantly faster than the IT spending growth average."
Tucci did not address the Oct. 17 news that the company's partnership with Dell to resell EMC hardware has been dissolved following a 10-year run.
Editor's note: This story was updated to correct the percentage of net profit from 32 to 28 percent.