EMC Extends String of Strong Quarterly Reports

Dips in stock prices due to VMware's uncertain 2008 outlook can't erase EMC's strong quarterly results.

Storage infrastructure giant EMC continued its string of flush financial reports Jan. 29, showing record fourth-quarter and full-year revenue and strong year-over-year growth in profit, earnings per share and operating cash flow.

It was EMC's 18th consecutive quarter of double-digit, year-over-year revenue growth. The financial rewards were sparked by double-digit revenue growth across the company's Information Storage, Content Management and Archiving, RSA Information Security, and VMware Virtual Infrastructure business lines and its four major geographies.

One of the company's hottest subsidiaries, virtualization market leader VMware, didn't fare quite as well in the fourth quarter, even though its outlook is equally positive.

VMware's stock value suffered a huge drop from $83 to $60.73 per share in after-hours trading Jan. 28, lost about 27 percent of its paper value-or about $8 billion-in a matter of hours because it reported fourth-quarter revenues that fell short of Wall Street expectations. VMware also forecast 2008 revenue growth of 50 percent, compared to 88 percent in 2007.

In response to the VMware slide, EMC saw its own stock dip 11.5 percent on Jan. 28. EMC closed at $15.89 per share on Jan. 29, down $1.02 on the day.

But the stock problems couldn't erase the parent company's good overall quarterly report. EMC's total consolidated revenue for the fourth quarter of 2007 was a record $3.83 billion, an increase of 19 percent over the $3.21 billion reported for the fourth quarter of 2006.

During the quarter, EMC generated operating cash flow of $979 million-an increase of 50 percent compared with the same period a year ago-and free cash flow of $712 million, an increase of 78 percent year-over-year.

Total consolidated revenue for EMC's full 2007 fiscal year was a record $13.23 billion, 19 percent higher than the $11.16 billion reported for the full 2006 fiscal year.

Chris Preimesberger

Chris J. Preimesberger

Chris J. Preimesberger is Editor of Features & Analysis at eWEEK, responsible in large part for the publication's coverage areas. In his 12 years and more than 3,900 stories at eWEEK, he...