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

To: bob gauthier who wrote (11378)	10/16/2000 2:15:49 PM
From: Gus	Read Replies (1) \| Respond to of 17183

EMC Earnings Report - October 18, 2000 (before the bell) MCDT Earnings Report - October 19, 2000 (after the close) INTERVIEW-EMC sees faster growth, no problem in euro, parts By Daisuke Wakabayashi TOKYO, Oct 13 (Reuters) - EMC Corp , the market leader in electronic data storage, said on Friday it expects accelerating sales growth, while its performance is not being hurt by either the weaker euro or parts shortages. "EMC has been telling people all through the year that we see accelerating growth and we still think that kind of performance is possible," EMC's Chief Executive Officer Michael Ruettgers told Reuters in an interview. He said that, while the company has experienced parts shortages in the past quarter, "parts, for us, is a past problem." "It kept us from exceeding where we thought we might be in the third quarter, but in the fourth quarter, I think we're all set," Ruettgers said. [My notes: 80% of quarterly revenues come from installed base of 27,000+ (excluding mid-range Clariion), 99% customer retention rate, highest customer rankings in industry, no top 10 customer in one quarter is a top 10 customer in the succeeding quarter, over 300 new customers added in each of the last 6 quarters, etc] Currency and supply management risks have loomed large as investors cut their exposure to technology manufacturers in recent weeks. Intel Corp cited weaker European demand when it cut its third-quarter forecasts in late September. Dell Computer Corp , the world's number-two PC maker, followed with a similar warning earlier this month. But Ruettgers said EMC has effectively hedged against risk in the euro, which has fallen 14 percent against the dollar since the start of the year. "European business for us continues to be pretty strong," he said. "On the financial side, EMC has been careful not to let dramatic changes in the currency market make much of an impact on us." In 1999, EMC booked about 30 percent of total sales for its storage and software services to Europe and the Middle East. EARNINGS DUE SOON EMC said it will report sometime within the next week its earnings for the quarter ending on September 30. A poll of 25 analysts forecast earnings per share on average of 19 cents for the current quarter, according to First Call/Thomson Financial. That would represent profit growth of 38 percent on the year. EMC holds a nearly 35 percent share of the fast-growing market for networked storage, outdistancing its nearest rival IBM Corp , which has 22 percent, according to Dataquest. By EMC's own estimates, that market could be worth more than $78 billion by 2003 and $100 billion by 2005 as businesses deal with more information and more of that is stored online. "Information is doubling every year for a Global 2000 company, every 90 days for Internet companies," said Ruettgers, who was in Tokyo for a regular visit to the company's Japan operations, its largest in Asia. Big server suppliers such as Sun Microsystem and Hewlett-Packard and new start-ups such as Network Appliances have launched aggressive campaigns to cut into EMC's lead. But EMC cites a recent survey of IT professionals that gives the company the highest rating in customer satisfaction. *"Customers are choosing the best of breed and none of those companies are best of breed in storage," he said.* [My notes: In 1998, EMC routinely got 1 out of every 2 storage system sold with Sun's high-end Starfire which sells for more than $1 million each. IBM (x-y-zServers), Compaq (Wildfire) and HWP (Thunderdome) all have Starfire-killers this year. More opportunity for EMC to sell its flagship Symmetrix ($3M+)] EMC has been hit hard by the sell-off of technology shares that followed Intel's earnings warning. The shares are down 18 percent from their September 20 peak of 103 15/16. But EMC shares have appreciated more than 80,000 percent since the beginning of the 1990s, bringing its market capitalisation to more than $185 billion. "You get sentiment that moves the entire market one way or another. Today it looks like it is moving against tech, but selectively EMC has still had a very strong year," Ruettgers said. "We're number one in a growing marketplace. Storing your information is something most companies cannot defer." ragingbull.altavista.com