* Raises full-year adj. profit forecast to $1.91/shr vs est
* Raises share buyback plan to $3 bln from $2 bln for 2014
* 2nd-qtr revenue $5.88 bln vs est $5.83 bln
(Adds analysts' comments, details about results)
By Soham Chatterjee
July 23 Data storage products maker EMC Corp
, under pressure from activist investor Elliott
Management to boost shareholder returns, accelerated its share
buyback plan and raised its current-year profit forecast.
The company raised its share buyback plan to $3 billion from
$2 billion for 2014 and said it expects to return more than $7
billion to shareholders over the course of 2013 and 2014 in the
form of buybacks and dividends.
The Wall Street Journal reported on Monday that Elliott
Management Corp had taken a $1 billion stake in EMC with the aim
of pushing it to spin off its VMware Inc virtualization
"The share buyback increase is a positive, although I would
have expected the full year EPS to be raised further given the
EPS beat by 1c (1 cent) in Q2 and the reduction in shares due to
the buyback," Macquarie Securities analyst Rajesh Ghai told
EMC raised its full-year adjusted profit forecast to $1.91
per share from $1.90. The company also reaffirmed its full-year
revenue outlook of $24.575 billion.
Analysts were expecting an adjusted profit of $1.90 per
share on revenue of $24.57 billion, according to Thomson Reuters
"Although guidance was essentially in line with the Street,
we would characterize the company's 2Q results as respectable
for EMC," FBR Capital Markets analyst Daniel Ives said.
"(Results) should give investors some optimism that the
company's next-generation datacenter vision is starting to play
out in the field."
Q2 REVENUE BEATS
Net income fell to $589 million, or 28 cents per share, in
the second quarter ended June 30, from $701 million, or 32 cents
per share, a year earlier, the company said on Wednesday. (bit.ly/1rK1xra)
Excluding items, the company earned 43 cents per share, in
line with analysts' average estimate.
Revenue rose about 5 percent to $5.88 billion, helped by
higher sales of newer flash storage products.
Analysts had expected revenue of $5.83 billion.
FBR Capital's Ives called the company's results "a victory
and a step in the right direction."
Excluding the company's slow-growing high-end storage
business, information storage revenue rose 7 percent.
Sales at its emerging storage unit, which makes
network-attached, cloud and all-flash storage products, jumped
EMC is trying to boost growth by focusing on mid-tier
products such as flash-based storage and replacing storage
machines with software-based technologies as businesses are
shifting toward faster and cheaper options than high-end storage
VMware - which accounts for about a quarter of EMC's total
revenue - reported better-than-expected quarterly results on
Tuesday as more customers bought its software that allows
multiple operating systems to run on a machine.
EMC's shares were up 0.63 percent at $28.70 in premarket
trading. The stock had gained about 14 percent this year through
(Reporting by Soham Chatterjee in Bangalore; Editing by Kirti
Pandey and Maju Samuel)