EMC, IBM Report Shows Spending Slump
By JUSTIN POPE
AP Business Writer
Thursday April 18, 9:01 pm Eastern Time
biz.yahoo.com
EMC, IBM Reports Show Business Technology Spending Still Slumping
BOSTON (AP) -- With double-digit drops in first-quarter revenue, data storage company EMC and computer giant IBM inspired little confidence that corporate technology spending is rebounding.
Hopkinton-based EMC said Thursday it lost $77 million, or 3 cents per share, in the first quarter, in contrast to a profit of $399 million, or 18 cents per share, a year ago. Revenues fell 14 percent.
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The news came a day after IBM Corp. reported a 31-percent drop in first-quarter earnings, in line with the reduced expectations it laid out last week in a rare earnings warning.
IBM, which makes a wide array of computer products, and to a lesser extent EMC, which makes the hardware and software that manage large chunks of data for mostly corporate customers, are viewed as proxies for business technology spending.
Also on Thursday, research firm IDC reported that worldwide PC sales fell 2.7 percent for the first quarter to 31.4 million. The firm did not divide the figures between consumer and business sales, but Roger Kay, IDC director of client computing, said traditionally 30 to 40 percent of PC sales are for business.
Investors liked the news that EMC had reached a $200 million savings target a quarter early and bid up shares 60 cents, or 6 percent, to $11 in trading Thursday afternoon on the New York Stock Exchange, but it fell 32 cents in extended trading.
Shares of IBM were up $4.14, or 5 percent, to close at $88.95 after the company said there were signs business was stabilizing. In extended trading, however, shares were down $1.24. |
