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Technology Stocks : EMC How high can it go? -- Ignore unavailable to you. Want to Upgrade?

To: Mr. Tomatohead who wrote (7847)	10/20/1999 11:20:00 AM
From: JustMy2Cents	Read Replies (1) \| Respond to of 17183

M E R R I L L L Y N C H Research Bulletin Research Summaries Reference Number 11229327 United States Oct/20/99 10:58 Investor Support Emc Corp (Emc; $64 1/16; B-1-1-9) 1999E $1.07; 2000E $1.40 o EMC reported Q3 results of $0.29 per share today. Our estimate was $0.27. o We believe that both the quarter and outlook were very good. o We think the shares are weak today because EMC couldn't be entirely clear on the Data General acquisition and its impact on the revenue line. o We expect more clarification on this issue over the next month or so. Company is saying however that the Data General transaction should be accretive next year. o Revenue was up 33% versus our 34% estimate, with the difference occurring in a subsidiary. o The gross margin came in at 57.5%, higher than we were looking for. o The guidance was positive. o Company said they see no Y2K problems. o Demand from the Internet space is also strong. o EMC said next year they expect to grow in the mid 30% range in revenue, and perhaps even somewhat faster in earnings. We believe this is good news. o We do not see any fundamental problems with EMC and reiterate our Buy/Buy rating, particularly on weakness.

To: Mr. Tomatohead who wrote (7847)	10/20/1999 11:27:00 AM
From: brian z	Read Replies (1) \| Respond to of 17183

This is from Briefing.com......They said EMC should be up TODAY. Pretty good contrary as always. Do they know EMC usually sell off after earnings? EMC Corp. (EMC) 69 7/16: Shares of provider of enterprise storage systems, software and services should get a lift this morning after the company reported better-than-expected results. EMC earned $0.29 per share, two cents better than the First Call estimate and 52.5% ahead of year-ago profit of $0.19. Revenues rose 33% to $1.33 billion from a year-ago and 3.1% on as sequential basis as the company enjoyed good results across all regions. In fact EMC gained market share during the latest period while improving margins as growth in Internet related business created "unprecedented demand for intelligent enterprise storage." In recent days, the stock has been under some selling pressure as investors have not been willing to bid the stock up due to concerns that the mainframe storage product market along with the external RAID market may not be as robust. In fact, there have been lots of Y2K worries of customers pulling back orders during the second half of 1999. However, as EMC's financial results suggest, both domestic and international business were strong led by a 45% increase in Asia-Pacific revenues and "strong profit contributions from all major regions." And sales continue to expand at a very healthy pace that should allow EMC to easily meet full-year estimates of $1.05 per share for 1999, up 40% from year-ago profit of $0.75. The stock is currently off from an earlier high of $78, but has appreciated by more than 65% since the beginning of the year. Given the latest earnings results, the stock should see some bounce back today as it appears that business is progressing well with EMC generating a larger share of revenues from the Asia-Pacific region at a time when economies in that area are starting to recover. This suggest that results in the coming quarters should be further buoyed by this particular region. - RN