(Corrects net income. The error first occurred in UPDATE 1)
By Nicola Leske
Jan 29 Data storage equipment maker EMC Corp
expects IT spending to improve slightly this year on the
back of demand for cloud computing and data analytics but
offered a 2013 earnings outlook that missed estimates.
"I think there is some lingering uncertainty for 2013 for
sure, but I see more of a cautious optimism out there, which is
an improvement," Chief Executive Joe Tucci told analysts on a
call on Tuesday.
"Looking at 2013, we expect (global) IT spend to grow at 3
percent for the year," Chief Operating Officer David Goulden
said, adding that "EMC revenue will grow faster at 8 percent."
Information technology spending growth in 2012 was around 2
percent, he said.
Tucci added that EMC expects all regions with the exception
of Western Europe and Japan to show higher growth.
Nevertheless, he said, government tech budgets would be
tighter than in 2012.
EMC said on Tuesday that non-GAAP 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 $869.9 million
or 39 cents a share from $832 million or 38 cents in the
Non-GAAP earnings were $1.2 billion or 54 cents per share
compared with analysts' estimates of 52 cents.
Revenue was $6 billion, up 8 percent. Analysts had expected
"We did see a moderate budget flush, but customers continued
to be cautious with their IT acquisitions," Tucci said, adding
that the "quarter was back-end loaded," resulting in a strong
EMC is benefiting from growing demand for cloud computing -
the delivery of computing power, software and storage from
centralized data centers that run on technologies introduced
over the past few years.
ISI Group analyst Brian Marshall said the quarter looked
solid while the outlook appeared to be "a bit light."
FBR analyst Daniel Ives said that EMC was well positioned to
capitalize on a new generation of data centers but that its
VMware 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
VMWare shares were down 20 percent at $78.65 and EMC shares
were down $1.62 or 6.4 percent at $23.58 on Tuesday.
"The weakness in shares is mostly due to VMware," Ives said,
adding that EMC's core business did better than expected in the
(Reporting by Nicola Leske; Editing by Maureen Bavdek, Chizu
Nomiyama and Phil Berlowitz)