EMC: Everything's 'Better'
CEO Tucci spreads cheer as EMC's quarterly and year-end report supports news of IT uptick
January 23, 2004
![Network Computing logo Network Computing logo](https://eu-images.contentstack.com/v3/assets/bltde8121fc52c5c8f3/blt3f3d0318f746b1c2/65a530e4187606040a1d8b8c/placeholder.png?width=1280&auto=webp&quality=95&format=jpg&disable=upscale)
EMC Corp. (NYSE: EMC) closed its fiscal year today with better-than-expected quarterly growth. And while guidance for next quarter is no better than previous expectations, the company expects growth for 2004 to exceed 25 percent (see EMC Posts Q4 Profit).
The quarter completed a strong turnaround year for EMC, which reported $496 million in income for fiscal 2003 after losing $119 million in 2002. EMC's quarterly revenues were $1.86 billion, up 23 percent sequentially. Quarterly net income was $220 million or 9 cents per diluted share, compared with $159 million and 7 cents per share the previous quarter (see EMC Cowboys Up in Q3).
EMC's revenues support a sense that IT spending on storage is enjoying an uptick. The company posted strong results across all of its product lines, including newly acquired software from Legato and Documentum acquisitions. Revenue from its high-end Symmetrix SAN array and related software was $732 million, up 17 percent sequentially. DMX, the newest version of Symmetrix, accounted for 95 percent of Symmetrix revenue (see EMC Flexes DMXes and EMC Debuts DMX, Part Deux). The Clariion mid-tier SAN system and related software brought in $270 million for an 18 percent gain from the previous quarter. EMCs Celerra NAS family had $161 million in revenues for an 18 percent sequential gain, driven by the newest gateway, the NS600G (see EMC Massages Midrange NAS).
Legato products contributed $77 million to EMC for the quarter, and Documentum added $31 million. EMC closed both acquisition deals during the quarter (see EMC Closes Legato Acquisition and EMC to Close Documentum Buy).
EMC CEO Joe Tucci crowed about the company’s 2003 success during a conference call with analysts today, then broke into a commercial for EMC’s information lifecycle management (ILM) push this year.“I absolutely believe 2004 will be a better year for IT, a better year for storage specifically, and a better year for EMC,” Tucci said. “As the saying goes, ‘You ain’t seen nothing yet.’ Propelling us into a strong 2004 will be our crisp execution against our information lifecycle management strategy.”
Tucci talked compliance, too. Asked about how much the need to support new corporate data storage regulations will drive Documentum sales, Tucci said, “I belive if this is a football game, we’re still in the first quarter of this opportunity.”
Tucci promised this year would be “an active year on the introduction front,” beginning with a product launch in February. At the least, EMC is expected to introduce a new Clariion line, incrementally improve the Symmetrix DMX, and refresh its software this year.
To further drive home the ILM point, EMC today announced its deal with the Pentagon Renovation Project. This is a follow-on to existing work and calls for EMC to provide networked storage, business continuity solutions, and open management software. The contract is expected to bring in $40 million (see EMC Wins $40M Pentagon Contract).
For all the optimism, EMC’s guidance for the first quarter of 2004 calls for a slight dip in revenues -- to between $1.8 billion and $1.835 billion in earnings, or 5 cents per diluted share. The company cites lower volumes, amortization from acquisitions, and expenses from Legato and Documentum, as well as a 1 cent charge associated with the December acquisition of VMware (see EMC Gobbles VMware).Even with expectations down a bit for the coming quarter, EMC remains within analyst projections, and the guided numbers are a huge jump from the 2003 first quarter, when EMC reported a profit of $35 million, or 2 cents per share, on revenue of $1.38 billion. EMC’s guidance for 2004 consolidated revenues is more than $7.8 billion, up 25 percent from the $6.24 billion from 2003.
EMC's news continues a strong earnings season for storage vendors, based on what analysts see as improvements in IT spending and the economy in general (see Hopes Up for Storage Earnings). Still, early this afternoon, EMC shares were following a tech market trend downward, selling at $14.90, down $0.20 (1.32%).
— Dave Raffo, Senior Editor, Byte and Switch
You May Also Like
Maximizing cloud potential: Building and operating an effective Cloud Center of Excellence (CCoE)
September 10, 2024Radical Automation of ITSM
September 19, 2024Unleash the power of the browser to secure any device in minutes
September 24, 2024