Data storage systems vendor EMC Corporation today reported its highest revenue growth in three years and bumper profits for the first quarter of 2004, providing further evidence of a strong recovery in the technology sector.
Total consolidated revenue for EMC’s first quarter was US$1.87bn, 35pc higher than the US$1.38bn reported for the first quarter of 2003. Net income for the first quarter of 2004 was US$140m or US$.06 per diluted share, including a charge of US$.01 per share, primarily related to the recent acquisition of VMware and certain additional restructuring charges. This compares with net income of US$35m or US$.02 per diluted share for the first quarter of 2003.
Joe Tucci, EMC’s president and CEO, attributed the strong performance to the company’s technology and strong product range. “This accelerating growth, which I believe is among the highest of any major IT supplier, is being fuelled by customers around the world embracing EMC technology that saves them money, simplifies their operations and protects their information assets. We are delivering the world’s broadest line-up of storage and information management products and services.”
Tucci said that EMC’s newly established software divisions – Documentum, Legato Software and Vmware – had made an important contribution in the quarter as customers grappled with the explosion of digital content, continued the shift to the latest storage technologies such as disk-based recovery systems and storage area networks. The combined revenue of these divisions grew 30pc compared with the same quarter last year.
The company’s investments outside the US also paid dividends with non-US regions contributing 43pc of first quarter revenues compared with 37pc last year.
Financially the company is in a very strong position. It still has cash and other investments worth US$6.7bn after investing nearly US$600m in the Vmware acquisition and a stock buy-back.
Said Bill Teuber, EMC’s chief financial officer: “In addition to providing EMC with needed agility to react to future opportunities, a portion of these funds will be used to strengthen our new software divisions, deepen our penetration in the commercial market, expand further into promising regions in Asia and Eastern Europe, enhance EMC’s own information infrastructure, and continue to evolve EMC into one of the world’s most powerful and recognized technology brands.”
Looking ahead, the company said it expected revenues for the second quarter 2004 to be between US$1.95bn and US$1.975bn and for operating income, as a percentage of revenue, to reach the mid-teens by the fourth quarter of 2004.
By Brian Skelly