EMC earnings fall 43%, execs say worst is past

IDG News Service - EMC's second-quarter net income fell 43% year on year, and revenue fell 11 %, as customers cut back spending on IT projects, the company said Thursday.

That spending is no longer in decline, however, and is now stabilizing, EMC said, pointing to a 3% increase in revenue compared to the previous quarter, and a 6% rise in net income. It expects revenue to continue increasing at the same rate through the third quarter.

Including revenue from its acquisition of data deduplication vendor Data Domain, EMC expects third-quarter revenue will pick up even faster, between 4% and 5% up on the second quarter.

That acquisition is now completed, EMC announced Thursday, with the holders of around 90.3% of the outstanding Data Domain shares having accepted its $33.50-per-share offer. With the shares EMC already held, that gives it control of 94.2% of outstanding Data Domain shares.

EMC reported net income of $205.2 million on revenue of $3.26 billion for the quarter ended June 30, down from $360.1 million and $3.67 billion respectively for the year-earlier quarter.

Revenue from the company's information infrastructure business -- information storage, content management, archiving and RSA Security -- totalled $2.8 billion, up 5% quarter on quarter. VMware, the virtualization specialist majority-owned by EMC, contributed revenue of $455 million.

Despite its optimism about growth in the coming quarters, EMC expects revenue for the full year to decline to $13.8 billion, including $200 million from Data Domain, with earnings per share of 51 cents. For 2008, the company reported revenue of $14.9 billion and earnings of $1.35 billion, or 64 cents per share.