EMC posts sales gain, but offers no forecast

Profits hurt by restructuring charge

EMC Corp. defied the economic doldrums in the fourth quarter of 2008, posting revenue up 5% from a year earlier on the strength of its storage systems and the VMware virtualization business.

But the Hopkinton, Mass.-based company's profit fell, hit in part by a restructuring charge of 10 cents per share. Net income was $288 million, or 14 cents per share, a sharp drop from a year earlier, when EMC reported net income of $526 million, or 24 cents per share. Not counting the restructuring charge, EMC made 24 cents per share in the quarter, slightly beating the consensus estimate of 23 cents per share among analysts polled by Thomson Reuters.

Quarterly revenue hit a record $4.02 billion, including VMware and all other EMC businesses. That surpassed analysts' estimates of $3.99 billion. VMware saw the strongest revenue increase, from $412 million to $514 million, and EMC's core storage business also gained, with its revenue rising to $3.14 billion from $3.03 billion a year earlier.

But security product revenue from the company's RSA division fell slightly, and the content management and archiving division saw a drop of more than 10%.

EMC beat the downturn by aligning itself with customers' priorities and delivering a strong product lineup, said Chairman, President and CEO Joe Tucci in a press release. But the company wouldn't estimate future revenue or earnings, citing the weak economy and limited visibility. EMC said it will continue to streamline operations and cut costs throughout 2009.

Revenue growth was strongest in the U.S., with a 6% gain from a year earlier, EMC said. Revenue from outside the U.S. was up 4% in the quarter.

For the full year 2008, EMC had total revenue of $14.88 billion, up 12% from a year earlier, it was the company's sixth consecutive annual revenue increase. Net income for the year was $1.35 billion, or 64 cents per share.

Copyright © 2009 IDG Communications, Inc.

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