EMC Reports 58% Hike in Q3 Net Income

If there are clearer indicators than EMC’s quarterly earnings reports that storage, cloud computing and data protection continue to be the most vibrant and profitable sectors in IT, they haven’t surfaced.
The data storage and security giant in Hopkinton, Mass., on Oct. 19 again reported record financial results for the company’s third fiscal quarter of 2010, showing net income of $472.5 million, or 22 cents per stock share-a 58 percent hike year over year.
EMC also reported consolidated revenue of $4.21 billion, a 20 percent upgrade over Q3 2009.
Much of this sharply upward financial success is due to EMC’s expanded gross and operating margins, which have increased substantially on a year-over-year basis.
The company posted record year-to-date operating cash flow and free cash flow of $3 billion and $2.2 billion, which grew 31 percent and 22 percent, respectively, compared with the year-ago period.
The company completed the quarter with $10.5 billion in cash and investments, CFO David Goulden told a conference call audience.
“Customers are looking to EMC in increasing numbers as a trusted partner for their cloud computing build-outs,” EMC Chairman and CEO Joe Tucci said on the call.
Tucci said that the company’s vBlock cloud system-building partnership with Cisco Systems and VMware, which launched in November 2009, is “well ahead of plan, in Q2, Q3 and for the year,” although he declined to disclose sales numbers.
Investment in vBlock systems paying off
EMC has invested substantially in providing the storage and data protection for vBlocks, which are preintegrated, preconfigured computing systems that also consist of networkware from Cisco and virtualization software from VMware.
The resulting production systems range in size from hundreds to more than 6,000 virtual machines, depending upon the need of the customer.
vBlock systems vary in price from the low hundreds of thousands to multiple millions of dollars, and Tucci said on the Oct. 19 call that he is “pleased with the progress of the project.”
“EMC remains focused on-and is taking share in-markets that are growing considerably faster than IT as a whole,” Tucci said. “We remain confident that we’ll continue to produce double-digit growth rates over the long term.”
Cloud computing is driving a fundamental change in the way IT is designed and managed, Goulden said.
“This represents a massive opportunity and is happening now in various phases across the globe. Our strategy and business model remain strong, and our investments continue to pay off,” Goulden said.