EMC reports 32% rise in fourth-quarter earnings
DATA STORAGE group EMC has gained the most in three months after reporting a 32 per cent increase in fourth-quarter earnings as data growth spurs demand for its products and software from majority-owned VMware.
The world’s biggest maker of storage computers rose 5.5 per cent to $24.73 in morning trade in New York yesterday, after earlier touching 6.3 per cent for the biggest intraday jump since October 18th. The stock fell 5.9 per cent in 2011. Net income rose to $832 million, or 38 cents a share, from $628.6 million, or 29 cents, a year earlier, the Massachusetts-based company said yesterday in a statement.
Excluding some items, profit was 49 cents, beating the estimates.
EMC is benefiting as a rising tide of digital data fuels purchases of storage gear, while a boom in data-centre building generates demand for VMware software designed to make servers more efficient.
The company has used acquisitions such as Data Domain, Isilon and Greenplum to focus on growing parts of the data storage and back-up market, Maynard Um, an analyst at UBS who recommends buying the stock, said in a note to investors.
Sales advanced 14 per cent to $5.57 billion globally, compared with the $5.49 billion average estimate. Business outside the US, which now accounts for 46 per cent of revenues, rose 12 per cent – with the fastest growth in Asia-Pacific and Latin America. Growth in Europe the Middle East and Africa was 6 per cent.
Jason Ward, EMC’s Ireland country manager, said 2011 was another record for the company in Ireland, which houses the group’s largest manufacturing site outside the US in Cork.
“As demand for hybrid cloud and big data solutions surges, our rapidly expanding channel and mid-market business is expected to continue growing, driving further expansion through next year.”
Bob Savage, vice-president and managing director of EMC’s Centre of Excellence in Cork, said the company was “consolidating our presence as one of the country’s largest employers and an enabler for economic recovery through innovation and new technologies”.
EMC has forecast 2012 revenues of $22 billion. – (Bloomberg)