EMC Reports Loss; Revenues Drop

Net loss for the quarter was $51 million; revenue was $1.26 billion&#151down 9 percent from the prior quarter.

EMC Corp. today announced $1.26 billion in revenue for the third quarter of 2002, down 9 percent from the prior quarter but up 4 percent from the year-ago quarter, officials said.

Net loss for the quarter was $51 million, which matched previous warnings from EMC officials.

Joe Tucci, president and CEO of the Hopkinton, Mass., company, said the economy is to blame. "The IT spending drought got even worse as the third quarter came to a close. Corporations are under-spending their existing budgets," he said. EMC is "taking further steps to align our costs with the realities of this painful economy," he said.

EMCs headcount is now at about 17,000, but most layoffs will be finished in the fourth quarter, he said.

The companys highlights in the third quarter were the launch of its sixth-generation midrange Clariion models, the acquisition of software startup Prisa Networks Inc., the launch of new AutoIS software, and the start of CTO Mark Lewis reign. EMC also bid to acquire bankrupt Sanrise Inc., but the quarter was marred by patent lawsuits with Lewis prior employer, Hewlett-Packard Co.

Industry watchers expect EMCs next major moves to be an announcement next month of spin-off Diligent Technologies Corp.; the launch of its third new Clariion model, the CX200, to be manufactured by EMC partner Dell Computer Corp.; and the launch of a new high-end Symmetrix early next year.

"Based on IBMs storage results and our industry checks on Hitachi [Ltd.]s storage business, we believe EMC has gained market share in the mid-range in the Sept. quarter and lost share on the high-end," Salomon Smith Barney Holdings Inc. analyst Clint Vaughan said, in a report today.