EMC Posts Strong Quarter

SAN FRANCISCO (AP) - EMC Corp. said Tuesday that its net income
jumped 58 percent in the latest quarter, the first time since the
spring of 2008 that profit has risen at the information-management
company.
Revenue also ticked higher, and its 2010 forecast was above Wall
Street's projections. EMC shares rose almost 5 percent in midday
trading.
EMC's results offered the latest signs that corporations'
spending on technology is rebounding from depressed recession
levels. The same pattern also appeared this month in the latest
numbers from Intel Corp., which reported strong sales of chips for
computer servers, and IBM Corp., whose revenue grew for the first
time in a year and half.
EMC is the top maker of data-storage machines, and research firm
IDC says parts of the storage market that had been declining have
started showing "renewed vigor."
Cost cutting also helped lift EMC's results. The company
announced plans in January of last year to cut 2,400 jobs as part
of a restructuring to reduce costs by about $500 million in 2010.
EMC says it is substantially done with those job cuts and is on
track to reach its cost-savings target. The company has about
43,000 workers.
David Goulden, EMC's chief financial officer, said in a
statement that EMC is in "the best financial and operational shape
ever" coming out of the downturn.
EMC, which is based in Hopkinton, Mass., said it earned $426.5
million, or 20 cents per share, in the last three months of 2009,
up from $269.9 million, or 13 cents per share, a year earlier.
Excluding one-time items, EMC earned 33 cents per share. That
was 3 cents per share higher than the average estimate of analysts
polled by Thomson Reuters.
EMC's net income had fallen in each of the previous five
quarters as companies tightened their budgets in the financial
crisis.
Revenue was $4.1 billion, an increase of 2 percent. Analysts
were expecting flat revenue.
FBR Capital Markets analyst Daniel Ives wrote in a note to
clients that EMC's results were "solid" and that EMC should get a
lift from the better-than-expected performance reported Monday by
from VMware Inc. EMC owns a majority of VMWare, a maker of software
used in corporate data centers.
EMC shares rose 67 cents, or 4 percent, to $17.61.
For 2010, EMC predicts it will earn $1.12 per share, excluding
items, on $16.0 billion in revenue. Analysts were predicting $1.11
in profit and revenue of $15.5 billion.
For all of 2009, EMC's net income fell 12 percent to $1.1
billion and revenue slipped 6 percent to $14.0 billion.