EMC Turns in Solid Earnings Report, Sticks to 2013 Forecast
EMC reported solid quarterly results April 24 as the huge data protection provider set first-quarter revenue and net income records.
Q1 2013 revenue totaled $5.39 billion, up 6 percent year over year, and net income was $850 million, an increase of 4 percent over 2012.
While still impressive in an uncertain world economy, these numbers are far cries from the last nine years, when EMC routinely turned in double-digit revenue and profit percentages.
The stock price was basically unchanged from the previous close, moving up a fraction of a percent at $22.43 in early trading.
The Massachusetts-based IT giant, in reaffirming its full-year forecast, said that it expects overall IT spending to increase about 3 percent in 2013, although customers are remaining cautious in the face of continuing political and economic uncertainty.
President and Chief Operating Officer David Goulden went even further, predicting a 30 percent rise in revenue for the company over the next three years.
"With continued steady execution, we expect that EMC will achieve our previously stated longer-term potential of more than $30 billion in revenue in 2016," Goulden said.
Revenue from EMC's networked storage platforms portfolio—which includes EMC's high-end and mid-tier storage platform products, grew 10 percent year-over-year. Emerging storage sales grew 24 percent.
The company also saw continued high demand for its NAND flash-based caching and storage software, CEO and Chairman Joe Tucci said. EMC's VSPEX reference architecture packages continued to gain momentum among customers and partners, who have sold more than 1,800 VSPEX systems since their launch in April 2012.
Tucci told analysts and journalists on the conference call that it is generally taking longer for orders to filter through customers' purchasing procedures in the last several months.
"Most orders are subject to greater scrutiny, and many enterprises are now requiring a higher level of executive sign-off before they give final approval," Tucci said.