EMC profit misses estimates, 2012 outlook is cut
(Reuters) - Data-storage equipment maker EMC Corp (EMC.N) cut its full-year outlook on Wednesday and reported third-quarter sales and earnings below analysts' expectations amid reluctant customer spending.
Other IT companies such as Xerox (XRX.N) and IBM (IBM.N) have also reported slower business, especially in September, and have said customers are holding off on large purchases and investments amid economic uncertainty in the United States and Europe.
EMC, the world's biggest maker of corporate data-storage equipment, said net income attributable to the company totaled $626.3 million, or 28 cents per share. Excluding one-time items, it earned 40 cents per share, 2 cents below analysts' average forecast.
Consolidated revenue rose 6 percent to $5.28 billion, compared with expectations for $5.46 billion.
For the full year, EMC said it expects earnings per share of $1.68 to $1.70, and revenue of $21.60 billion to $21.75 billion.
Analysts on average were anticipating $1.72 per share on revenue of $22.03 billion, according to Thomson Reuters I/B/E/S.
In July, EMC reiterated its full-year profit forecast of $1.70 per share and its revenue outlook of $22 billion.
Despite the sales and earnings miss, FBR analyst Daniel Ives said EMC was a good bet. "It's a company that has been able to navigate through choppy seas. EMC is a name more investors will bet on that not," Ives said, adding that investors were focused on the fourth quarter and 2013.
"If you look at the combination VMware and EMC ... in a slow growth environment it's a compelling story."
VMware (VMW.N), a publicly traded division of EMC, on Tuesday posted a third-quarter profit that beat estimates on stronger-than-expected sales to the U.S. government. But it forecast fourth-quarter revenue in a range largely below expectations.
EMC shares were down 1.9 percent in premarket trading.
(Reporting By Nicola Leske in New York and Supantha Mukherjee in Bangalore; Editing by Maureen Bavdek and John Wallace)