EMC rides cloud to record revenue in third quarter
Data storage vendor cites successful cloud computing business
Improving margins helped data-storage vendor EMC Corp. increase net income by 58 percent in its third quarter, the company reported Tuesday morning.
Shares of EMC (NASDAQ: EMC) gained 4 cents, or 0.2 percent, to 20.84. Not much of a bounce from a strong earnings report, but given that the Nasdaq and most major tech stocks took a beating through the entire trading session, EMC investors probably should be relieved.
EMC's third-quarter net income was $472.5 million, or 22 cents per share, up from $298.2 million, or 14 cents per share, in the third quarter of 2009. Excluding one-time costs, EMC reported a net profit of 30 cents per share -- right in line with consensus estimates -- versus 23 cents per share a year ago.
Revenue for Q3 was a record $4.2 billion, up 20 percent from last year's $3.5 billion. The Hopkinton, Mass.-based company's product revenue rose 22 percent, while revenue from services gained 17 percent.
EMC's operating margin nearly doubled to 15.4 percent from 8.7 percent in last year's third quarter. The company also reported record year-to-date operating cash flow and free cash flow of $3.0 billion and $2.2 billion, up 31 percent and 22 percent, respectively, from the year-ago period. EMC ended Q3 with $10.5 billion in cash and investments.
In a statement, EMC Chairman and CEO Joe Tucci cited the company's success in building a cloud business. "Customers are embracing EMC in increasing numbers as a trusted partner for their cloud computing build-outs," he said.
The company also upped its annual earnings and revenue to $1.25 per share on sales of $16.9 billion. In July, EMC forecast full-year earnings of $1.18 per share and revenue of at least $16.5 billion. Analysts have been forecasting net income of $1.21 a share on revenue of $16.7 billion.