EMC posts higher profits and a 35% rise in revenue

EMC, a supplier of data storage equipment and software, reported sharply higher first-quarter profit and a 35 per cent rise in revenue yesterday as corporate customers stepped up technology spending. The company employs more than 1,200 in Cork.

The Hopkinton, Massachusetts-based company also said revenue in the current quarter would come in slightly above Wall Street estimates. Its shares fell slightly in early trading.

"The outlook is positive," said Mr Omar Al-Midani, an analyst with Schwab Soundview Capital Markets, adding that EMC's financial targets were conservative.

"It's likely that they're going to beat again," he said.

Mr Al-Midani said the first-quarter results showed that corporate spending, also known as "enterprise" spending, on technology was not weakening, even if it was not yet surging.

"Storage is a priority item in IT budgets, and so, what I would say is, it sounds like the pick-up in the enterprise is there," he said.

However, he added: "To be able to say EMC's a proxy for enterprise pick-up is probably being overly bullish."

EMC posted a first-quarter profit of $139.8 million, or six cents a share, compared with year-earlier earnings of $35.2 million, or two cents a share.

Total consolidated revenue rose more than 35 per cent, to $1.87 billion from $1.38 billion. Excluding acquisitions, revenue would have risen 21 per cent. The results included a charge of one cent a share related to the company's purchase earlier this year of software company VMWare.

For the second quarter, EMC said it expected earnings of eight cents a share on revenue of $1.95 to $1.975 billion.