EMC Reports 54 Percent Jump in YOY Profits

As the world’s data multiplies, EMC keeps right on selling places to keep it — and making a handsome profit at the same time.
The world’s largest independent data storage company Jan. 26 reported a fourth-quarter profit of $426.5 million [20 cents per share] — up 54 percent from a year ago — as demand for its data protection, disaster recovery and security products continued on an upward sweep.
After the report was released, the company’s stock price rose 76 cents a share to $17.70. A year ago, EMC reported a profit of $269.9 million, or 13 cents per share.
Overall revenue was up 2 percent to $4.1 billion, compared to the $4 billion the company forecast, EMC Chief Financial Officer David Goulden said on the conference call.
“While 2009 was a tough year for everybody, EMC achieved a lot of good things and exited the year in a good position,” Goulden said. “While there is still uncertainty, we do expect 2010 to be better than 2009.”
Chairman and CEO Joe Tucci said during his remarks that demand for data storage and assorted services continue to be strong, and that the trend that isn’t going to end anytime soon.
“We are well positioned to lead the industry’s newest and potentially largest wave of IT, which we and others refer to as cloud computing,” Tucci said. “We expect the economy to continue to improve, and for the GDP growth to be in single digits worldwide. We’re still cautious, however, because there is potential for choppiness as job recovery lags.”
Company expects IT spending to rise in 2010
Tucci said he expects IT spending to increase by between 3 percent and 5 percent in 2010 and for storage market spending to grow in the 6 percent to 7 percent range. He also said that EMC believes the security and virtualization markets to grow “in the mid-teens to low-20s” percent area.
Tucci said the reason for EMC’s continued success is simply the quality of its products and services.
“You cannot beat innovative products, such as Avamar [deduplication company bought in 2006] and VMware [virtualization provider, bought in 2004] have shown,” Tucci said.
EMC got some help from its employees in 2009, when it asked every staff member to accept a 5 percent pay cut. The company also laid off 2,400 people during the year, despite the glittering financial picture it painted.