Bad news...
EMC Announces Preliminary Third Quarter Results
Weak Spending Climate, Global Economic Uncertainty Will Require Deeper Cost Reductions; EMC Board of Directors Approves Buyback of Additional 250 Million Shares
Thursday October 3, 4:25 pm ET
HOPKINTON, Mass.--(BUSINESS WIRE)--Oct. 3, 2002-- EMC Corporation (NYSE:EMC - News) today announced preliminary revenue and earnings per share for the third quarter of 2002, which ended September 30, 2002. EMC expects to report total revenue of approximately $1.25 billion, and a loss of $0.02 per share for the third quarter. This expected loss in the third quarter compares with a loss of $0.01 per share in the second quarter of 2002, with both periods presented before the benefit of any special items. EMC plans to announce complete third-quarter results on the morning of Thursday, October 17, 2002.
EMC made continued progress during the third quarter in its cost reduction efforts. The balance sheet continued to strengthen, and cash and investments grew by more than $100 million during the quarter. However, as a result of the continued weak outlook in IT spending, EMC will initiate further cost structure adjustments, including a reduction of approximately 7% in the company's workforce. This will bring the total EMC workforce to about 17,000 employees. In light of these developments, it does not appear likely that EMC will achieve its previously stated goal of reaching profitability for the second half of the year.
Joe Tucci, EMC's President and CEO, said, "The IT spending environment continues to be brutal. In fact, it got even worse at the very end of the quarter. Our third quarter was on track until late September. The harsh reality of reduced budgets and the uncertainty of the economic and geopolitical climate are weighing heavily on business confidence, causing key projects and the corresponding IT spend to be delayed. We saw no significant change in the competitive environment during the quarter. We don't know when IT spending growth will resume, but we do know this for sure: EMC is a great company, we lead one of the best markets in IT, and our automated networked storage strategy is resonating with customers everywhere."
EMC also announced that its Board of Directors today approved a buyback of an additional 250 million shares, to be initiated after the release of the full quarterly earnings on October 17, 2002. This authorization is in addition to the 50 million share buyback authorized in May 2001.
About EMC
EMC Corporation is the world leader in information storage systems, software, networks and services, providing automated networked storage solutions for organizations across the globe. Information about EMC's products and services can be found at www.EMC.com.
This release contains "forward-looking statements" as defined under the Federal Securities Laws. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) declines in revenues; (iv) insufficient, excess or obsolete inventory; (v) competitive factors, including but not limited to pricing pressures; (vi) component quality and availability; (vii) rapid technological and market change, the transition to new products and the uncertainty of customer acceptance of new product offerings; (viii) the relative and varying rates of product price and component cost declines; (ix) the ability to attract and retain highly qualified employees; (x) fluctuating currency exchange rates; (xi) risks associated with strategic investments and acquisitions; and (xii) other one-time events and other important factors disclosed previously and from time to time in EMC's filings with the U.S. Securities and Exchange Commission.
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Contact:
EMC Corporation
Mark Fredrickson, 508/293-7137
fredrickson_mark@emc.com
or
EMC Investor Relations
508/435-1000 |
