EMC 2Q profit falls 43 pct but tops Street views
SAN FRANCISCO — Fresh off a successful bid for a major acquisition, EMC Corp. said Thursday that its second-quarter profit plunged 43 percent on a sales decline of 11 percent.
The data storage company’s results topped Wall Street’s forecasts, though, as it cited better predictability in customers’ spending.
Its segment of the technology world will continue to be under pressure, with rival IBM Corp. also reporting a significant sales decline from data-storage products.
EMC sees the decline in technology spending persisting through the rest of the year. But the Hopkinton, Mass.-based company offered stronger guidance than expected, citing cost-cutting and better operational efficiency.
EMC said before the market opened that its quarterly net income was $205.2 million, or 10 cents per share, in the three months ended June 30. That compares with profit of $360.1 million, or 17 cents per share, in the year-ago quarter.
EMC’s profit was 18 cents per share excluding employee stock-based compensation and one-time items. On that basis, analysts expected profit of 16 cents per share, according to a poll by Thomson Reuters.
Sales slid to $3.26 billion, narrowly beating analysts’ average projection of $3.2 billion.
As the leader in external disk storage systems, the EMC is in a part of a market where sales slowed for the first time in five years at the end of 2008. Rivals’ sales are down, too. IBM Corp.’s storage revenue dropped 20 percent in the latest quarter.
EMC expects 2009 sales of $13.8 billion, slightly above Wall Street’s estimate of $13.5 billion.
Profit is expected to be 82 cents per share excluding items, EMC said. Analysts predict profit of 78 cents per share.
EMC recently agreed to buy Data Domain Inc. in a $2.1 billion transaction, beating out a rival offer from NetApp Inc.
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