Financial

posted on 23 July 2008 12:35

EMC reported revenues of $3.67 billion for its second quarter of 2008, 18 percent higher than the $3.12 billion of the Q2 '07 quarter.

GAAP net income was $377.5 million or $0.18/share, up 13 percent from Q2 '07's $334.4 million ($).16/share). Both revenue and net income were ahead of several analyst's expectations.

EMC ended the quarter with a record $8.1 billion in cash and investments. The quarter was EMC's 20th consecutive quarter of double-digit year-over-year revenue growth.

Recession Proof?

Joe Tucci, EMC Chairman, President and CEO, said, “EMC demonstrated solid second-quarter performance. ... Our focus on information infrastructure and virtual infrastructure is paying off and is the driving force behind our strong financial position, our successful business model and our competitive advantage. ... Despite continued economic uncertainty at the macro level, we believe spending on information infrastructure and virtual infrastructure technologies and solutions will continue to grow, driven largely by the need to manage the ever-expanding volume of information efficiently, securely and cost effectively.”

David Goulden, EMC Executive Vice President and Chief Financial Officer, said, “I am pleased with EMC’s execution and solid performance in the second quarter. We achieved strong top-line and bottom-line growth and ended the quarter with a record $8.1 billion in cash and investments. As one of the most trusted technology partners in IT, we believe we are well positioned strategically and operationally for ongoing success. ... EMC has amassed the broadest, most innovative and most integrated product portfolio in company history.”

Second-Quarter Highlights

- Revenue from EMC’s Information Storage business, which includes revenue from storage systems, storage software and related customer and professional services, reached $2.87 billion, an increase of 14% compared with the year-ago period. Growth in the Information Storage business reflects continued worldwide demand for EMC’s networked storage solutions, with particularly strong traction from faster-growing international regions, EMC’s mid-range storage systems connected to IP networks, and the company’s professional consulting and implementation services.

- Second-quarter revenue from EMC Symmetrix networked storage products increased 10% year over year, driven by continued customer demand for large-scale enterprise consolidation and improved energy efficiency.

- Celerra network-attached storage products continued to experience strong revenue growth, increasing more than 50% year over year.

- CLARiiON revenues grew 8% year on year. It was pointed out that there was some customer hesitation in purchases. The expectation is that a CLARiiON refresh is coming in the next month or three. Dell accounted for about 33% of CLARiiON sales, slightly down from the year-ago quarter's 35%. EMC is confident about this relationship despite the EqualLogic acquisition.

- EMC’s Content Management and Archiving business increased second-quarter revenue 18% year over year to $204 million.

- Revenue from RSA, The Security Division of EMC, grew 15% year over year, reaching $144 million and benefiting from strength in areas such as data loss prevention (DLP), identity protection & verification, and security information & event management.

- VMware contributed second-quarter revenues of $453 million, an increase of 52% compared to the year-ago quarter.

There was no mention in EMC's statement of CLARiiON sales.

From a geographic perspective, revenue from the United States increased 10% compared with the same period a year ago. Revenue from operations outside of the United States grew 27% year over year and represented a record 48% of total second-quarter revenue. Revenue from EMC’s Europe, Middle East & Africa (EMEA) region increased 27%, Asia-Pacific & Japan (APJ) revenue increased 27%, and Latin America revenue increased 24%, each compared with the year-ago quarter.

The outlook is that consolidated EMC revenues are expected to exceed $15 billion in 2008, a rise on previous exprectations, and consolidated GAAP diluted earnings per share (including the $79.2 million non-cash charge for in-process research and development (IPR&D) in the first quarter of 2008) are expected to be $0.74 in 2008.

^{[Chris Mellor.]}