February 23, 2001, 10:15 AM — After analysts at two financial firms recently predicted that a slowdown in IT spending would affect data storage equipment sales, market leader EMC Corp. yesterday lowered its growth forecasts for this year.
Formerly unscathed by economic downturns, EMC now expects revenue growth to be in the range of 25% to 35% for 2001, a decrease from its forecast last month of 33% to 37%. The decrease in growth is due mostly to a drop-off in sales to dot-coms.
A spokesman said sales to dot-coms, which made up 6% to 7% of the company's revenue during the second half of last year, have dropped to zero.
EMC said it expects the slump in Internet-related sales to be offset by overall demand from large global companies, networked information storage and strong growth in the Asian marketplace. "When challenged, we tend to rise to the occasion," the spokesman said.
The spokesman added that the company hasn't had any layoffs and "we don't expect any." EMC said it still expects to meet its $12 billion revenue target for 2001, which would be a 35% increase over last year's $8.87 billion in sales. Demand for storage appliances, software and services is strong so far for the first quarter, EMC said.
In a statement on the company's Web site, EMC Executive Chairman Mike Ruettgers maintained that the biggest risk to the U.S. economy is a self-fulfilling prophecy. "If enough pundits continue to predict that the U.S. economy will slow further, it will do just that," the company said.