BOSTON (Reuters) - EMC Corp EMC.N, the top maker of corporate data storage equipment, reported quarterly revenue ahead of Wall Street projections on Wednesday, boosting hopes for a recovery in the technology sector.
The results from EMC came after stronger-than-expected earnings on Wednesday from companies including chipmaker Intel Corp (INTC.O), technology services giant IBM (IBM.N) and software maker VMware Inc (VMW.N), which is a subsidiary of EMC.
Technology spending is on the upswing as large companies replace aging equipment and software in their data centers with “cloud” computing systems built using new virtualization technologies.
Virtualization allows one piece of hardware to perform the work of multiple machines, while cloud-computing lets companies cut costs by consolidating multiple computer systems into one central “cloud.”
EMC produces storage equipment for cloud computing centers, while its VMware subsidiary sells virtualization software.
“These guys are just in the right place at the right time. They are in the middle of what continues to be just a monster product cycle,” said FBR Capital Markets analyst Daniel Ives.
EMC reported that first-quarter revenue rose 18 percent from a year earlier to $4.6 billion, beating the average estimate of $4.5 billion, according to Thomson Reuters I/B/E/S.
First-quarter profit, excluding special items, was 31 cents per share, matching analysts’ average forecast.
EMC’s earnings were helped by stronger-than-expected from VMware, which reported late on Tuesday. VMware indicated its margins would expand this year, as it landed some big new clients using its software for cloud computing.
Shares in Hopkinton, Massachusetts-based EMC rose 1.6 percent to $27.15 in premarket trade.
Reporting by Jim Finkle; Editing by Derek Caney