EMC's $220m profit in sales boost

EMC CORP, the world's third-largest maker of data-storage computers, had a fourth-quarter profit of $220.1 million as acquisitions helped boost sales 25%.

EMC, which employs 1,300 people at the data-storage manufacturing plant at Ovens, Co Cork, made a loss of $63.9 million, or 3 cents, a year earlier.

Sales rose to $1.86 billion from $1.49 billion.

Sales this quarter will exceed analysts' estimates, helped by software products, the company obtained through acquisitions, chief executive officer Joe Tucci said in an interview.

Mr Tucci is buying software makers such as Documentum Inc and Legato Systems Inc to counter a decline in prices for hardware devices and remaking a company that until 2001 had a one-product line.

Excluding costs to buy closely held VMware Inc, EMC said profit will be 6 cents a share, matching the average forecast from Thomson Financial.

EMC had net income of 2 cents on sales of $1.38 billion a year earlier.

EMC made its largest acquisition by buying Documentum last quarter for $1.7 billion in stock to increase software sales with products that manage documents and audio and video files.

EMC also bought Legato for $1.3 billion in stock. EMC paid $635 million for VMware, whose programmes let clients run several operating systems, such as Microsoft Corp's Windows and freely distributed Linux, on the same server computer.

"We are absolutely on the right track," Mr Tucci said in the interview.

Mr Tucci said on a conference call he is working on integrating Legato, Documentum and VMware and not actively looking for more companies to buy.

"I'm really focused on swallowing what we have already begun to chew," he said.

The company sells network storage devices that cost $10,000 to $4 million to customers including MasterCard International Inc, General Mills Inc and Countrywide Financial Corp.

EMC lags Hewlett-Packard Co and International Business Machines Corp in sales of data-storage computers.

In December, EMC forecast fourth-quarter sales of $1.8 billion to $1.83 billion. In October, it said profit would be 5 cents a share. Analysts on average expected sales to rise to Thomson Financial survey.

The company will introduce hardware products on February 9, Mr Tucci said.

He wouldn't say how many products, give any prices or offer other details.

He said the products will be ready to be shipped to customers when they are announced and that more products will be introduced this year.

EMC has promised to cut its product-replacement cycle to 12 months to 18 months from about two years.