HOPKINTON, Mass. (CBS.MW) - EMC Corp. met lowered first-quarter
profit expectations, as revenue jumped 29 percent, the data storage
giant reported Thursday.
EMC said first-quarter net income rose 20 percent
to $399 million, or 18 cents per share, from $332
million, or 15 cents per share, in last year's first
quarter. Analysts had been expecting the company
to post 20 cents per share profit until last week
when EMC (EMC: news, msgs, alerts) warned it would fall short of that goal.
In its profit warning, the No.1 provider of hardware and software for computer
data storage also lowered its annual revenue growth expectations from up to
35 percent to "over 20 percent" now.
In a conference call with analysts Thursday, EMC executives said the
company was hurt by a slowdown in information technology spending late in
the first quarter. Still, EMC executives said their revenue growth remains
strong. First-quarter revenue rose 29 percent to $2.34 billion in the
first-quarter, EMC reported.
EMC executives said customers had ratcheted down their information
technology spending because of concerns about the slowing economy.
"Despite the high growth rates we saw in our core business, we saw
challenges in this first-quarter - the predominant one being the
macroeconomy," EMC Executive Chairman Mike Ruettgers said during the
call.
But now, Ruettgers said, the budget cutting appears to be near an end.
"We believe that most IT budgets in the U.S. and in many international
markets are now in the final firming stages for the year," Ruettgers said.
In a response to analyst's question, Ruettgers downplayed the chances for a
rapid snap back in information technology spending this year, but the
chairman said he expects some improvement. Even with the slowdown,
Ruettgers said, overall storage spending is expected to rise 17 percent in
2001. |
