EMC's 2013 EPS outlook misses Street
(Reuters) - Data storage equipment maker EMC Corp's (EMC.N) 2013 earnings outlook missed estimates but it reported higher-than-expected fourth-quarter earnings and revenue due to strong demand for cloud computing.
EMC said on Tuesday that earnings per share will be $1.85 this year on revenue of $23.5 billion.
Analysts forecast $1.90 per share for 2013 and revenue of $23.57 billion, according to Thomson Reuters I/B/E/S.
EMC said net income in the fourth quarter was $1.2 billion, or 54 cents a share, compared with analysts' estimates of 52 cents.
Revenue was $6 billion, up 8 percent. Analysts had expected $5.98 billion.
ISI Group analyst Brian Marshall said the quarter looked solid while the outlook appeared to be "a bit light."
EMC is benefiting from growing demand for so-called cloud computing - the delivery of computing power, software and storage from centralized data centers that run on technologies introduced over the past few years.
FBR analyst Daniel Ives said that EMC was well positioned to capitalize on new generation of data centers but that its VMware (VMW.N) unit would likely weigh on the shares.
EMC owns around 80 percent of software maker VMware, which is also publicly listed.
VMware said on Monday that it was cutting 900 jobs as part of a restructuring plan and offered a 2013 outlook below expectations. Its shares were set to open down 17 percent.
EMC shares on Tuesday lost 3.8 percent to $24.24 in premarket trading.
"The weakness in shares is mostly due to VMware," Ives said, adding that EMC's core business did better than expected in the fourth quarter.
(Reporting by Nicola Leske; Editing by Maureen Bavdek and Chizu Nomiyama)
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