EMC logs first loss in 12 years

EMC, the world's top maker of data-storage systems, yesterday reported its first quarterly loss in a dozen years as it took an $825 million (E;910.4 million) restructuring charge and battled stiffer competition amid an industry downturn.

EMC, based in Hopkintown, Massachusetts, and founded by the US ambassador to Ireland, Mr Richard Egan, also said it would increase the number of job cuts it planned to take this year to 4,000 from the more than 2,000 announced in September. That represents a cutback of 17 per cent.

A spokeswoman for Irish operations, which employ about 1,700 in Cork and Dublin, said the latest cuts would have no impact here. EMC has already agreed a deal with its Irish staff to take holiday time in an effort to reduce costs.

The latest reductions would bring the company's workforce to about 19,000 people.

EMC posted a third-quarter net loss of $945.2 million, or 43 US cents a share, reversing year-earlier net income of $458.2 million, or 20 cents a share.

Excluding the $825 million pre-tax charge for job cuts, excess inventory, plant closings and investment write-downs, the company posted a loss of $270 million, or 12 cents a share.

The loss was worse than analysts' estimates, which ranged from a loss of 11 cents a share to a one cent profit, with an average estimate of a five cent loss, according to Thomson Financial/First Call. EMC had warned last month that it was unlikely to break even in the third quarter.

Revenue dropped to $1.21 billion from $2.3 billion a year earlier. Besides facing a global downturn in information technology spending, EMC is fending off stepped-up competition from rivals that are dropping prices on hardware and software.