EMC sales soar to $1.48bn

EMC Corp, the world’s third-largest maker of computer data-storage systems, said second-quarter earnings soared as sales rose 6.6% and some costs fell.

Net income increased to $81.7 million, or 4 cents a share, from $808,000, or break even, a year earlier, EMC said Hopkinton, Massachusetts -based EMC’s sales rose to $1.48bn from $1.39bn. The company employs 1,200 people in Cork.

Selling, general and administrative costs fell 6.5%, and research and development spending declined by 1.2%. The share of sales from services increased to 24% from 21%.

EMC is emphasising sales of more-profitable software and services and has bought 10 software companies in the last three years to counter slumping sales of its storage devices.

EMC, led by chief executive Joe Tucci, said last week it had agreed to buy Legato Systems Inc, which makes software to study, back up and recover computer data, for $1.3bn.

A partnership Tucci formed with Dell Computer Corp has helped EMC increase sales of less-expensive storage devices.

The company raised its third-quarter forecasts to profits of 4c a share on

sales of $1.45bn to $1.5bn. EMC had expected profits of 3c on sales as high as $1.48bn.

Gross margin, the share of sales left after paying production costs, will be similar to the second quarter’s, EMC said.

EMC shares rose 11c to $11.18 at 8:11am trading before the regular opening of the New York Stock Exchange. They had gained 80% this year.

Including stock-option expenses, the company would have had losses of 1c a share in the second quarter and 4c a year earlier.

“The two words that best describe EMC’s second- quarter performance are solid and balanced,” said Mr Tucci.

“We are experiencing the benefits of a completely refreshed product portfolio, broadened services offerings and an expanded distribution network.

“All signs point to additional EMC market share gains during the second quarter ,” he said.