* 3rd-quarter adj profit $0.40/shr vs estimate $0.45
* Revenue $5.5 bln vs estimate $5.8 bln
* Cuts full-year rev forecast to $23.25 bln from $23.5 bln
* Shares fall 4 pct
(Adds analysts' comments, conference call details; updates
By Soham Chatterjee
Oct 22 EMC Corp, the world's largest
data storage equipment maker, cut its full-year forecast because
of the two-week U.S. government shutdown, sending its shares
down 4 percent.
EMC, which reported lower-than-expected quarterly results,
said the shutdown caused it to miss its revenue estimate by
about $120 million, which it did not expect to recover.
"Orders from the U.S. federal government that were expected
to close in the last weeks of the quarter did not," Chief
Operating Officer David Goulden said on a conference call.
Revenue from the U.S. government usually accounts for about
10-15 percent of EMC's total revenue in the third quarter,
compared with about 5 percent in the rest of the year, FBR
Capital Markets analyst Daniel Ives said.
Chief Executive Joe Tucci said that about 70 percent of
EMC's revenue from the government is based on short-term orders
that are completed and billed within the quarter.
This means that revenue foregone in the quarter cannot be
made up later.
EMC cut its full-year profit forecast to $1.80 per share
from $1.85 and its revenue forecast to $23.25 billion from $23.5
Analysts expected a profit of $1.86 per share on revenue of
$23.44 billion, according to Thomson Reuters I/B/E/S.
EMC said its forecast also took into account corporate
cutbacks in IT budgets as well as uncertainty about government
Research firm Gartner Inc cut its 2013 global IT
spending growth forecast in July, to 2 percent from 4 percent.
EMC unit VMware Inc reported a higher-than-expected
profit on Monday but said it expected government-related revenue
to be flat in the current quarter.
EMC's chief rival, NetApp Inc, has also forecast
lackluster results for the current quarter, blaming the slowdown
in government spending.
Analysts said EMC would benefit from new products and strong
licensing growth at VMware.
EMC and VMware have teamed up in a new venture, Pivotal Inc
in a bid to profit from demand for data analytics software.
EMC also launched its VNX 2 mid-range data storage
"EMC is not going to be as negatively impacted by the
federal situation going forward, as the top federal quarter is
behind and the federal situation is going to improve," FBN
Securities Shebly Seyrafi told Reuters.
Seyrafi said he expects EMC's VNX 2, ViPR software-defined
storage, XtremIO flash-based storage and its VMware unit to
generate growth in the fourth quarter and 2014.
VMware indicated that strong licensing revenue growth would
continue into next year.
"(EMC) has a solid opportunity to re-accelerate storage
growth given its new VNX product cycle and emerging storage
business, which are key ingredients in the company's recipe for
success heading into 2014 and beyond," Ives said.
Net income attributable to EMC slid to $586 million, or 27
cents per share, in the third quarter ended Sept. 30. Excluding
items, the company earned 40 cents per share, below the average
analyst estimate of 45 cents.
Consolidated revenue rose 5 percent to $5.54 billion,
missing the average estimate of $5.8 billion.
Hopkinton, Massachusetts-based EMC's shares were down 3.8
percent at $24.28 on the New York Stock Exchange in early
afternoon trading on Tuesday.
(Reporting by Soham Chatterjee; Editing by Savio D'Souza and