EMC misses sales and profit expectations

EMC reported first-quarter sales and profit that fell short of analysts’ estimates in a slowing market for storage devices, as the company nears a $67 billion takeover by Dell.

First-quarter profit excluding certain items was 31 cents a share, EMC, which employs more than 2,500 people in Ireland, said. Revenue was little changed from a year earlier at $5.48 billion.

Analysts on average had projected profit of 33 cents and sales of $5.63 billion.

EMC’s older and pricier storage devices are facing slowing demand and newer models using flash technology are not growing rapidly enough to make up lost ground. As the largest data storage maker, EMC is also being hurt as more customers opt to rent space from cloud vendors such as Amazon.com and Microsoft rather than buy their own gear from companies like EMC.

Dell’s planned purchase, the biggest technology acquisition ever, will combine EMC’s dominance in storage devices with closely held Dell’s number two position in servers, the powerful machines that run corporate computing.

“We continue to make progress on our combination with Dell,” Joe Tucci, chairman and chief executive, said in a statement. “Integration planning has accelerated to ensure we begin at full speed upon closing, the leadership team has been established, and we’ve received the vast majority of anti-trust approvals required.” China remains the only country that has yet to provide regulatory approval for the merger, Mr Tucci said on a conference call.

VMware, which is majority-owned by EMC and employs nearly 630 people here, forecast sales and profit for the second quarter that exceeded estimates and announced a new share buyback plan Tuesday. Shares jumped as much as 15 per cent – the most in more than two years – to $59.23.

– (Bloomberg)