EMC earnings miss target

EMC, the world’s biggest maker of storage computers, has cut its sales forecast for the year and posted earnings that missed estimates as a weak economy prompted corporate customers to curb spending.

Sales this year will rise from $21.6bn (€16.6bn) to $21.75bn, the company said.

EMC employs 2,700 people in Ireland between Cork and Dublin.

In July, it projected sales of $22bn. Third-quarter profit excluding some items was 40 cents a share, missing the 42c average of analysts.

EMC chief executive Joe Tucci said he anticipates only modest growth in technology spending next year, reflecting economic weakness that has curbed earnings throughout the computer industry. IBM, the biggest computer-services company, and Microsoft, the largest software maker, last week reported sales that fell short of expectations as corporate clients pared outlays.

Sales growth for EMC’s high-end Symmetrix storage gear grew just 5%, less than expected, Shebly Seyrafi, an analyst at FBN Securities said. “The quarter is rather disappointing.”

EMC’s sales climbed 6% to $5.28bn in the third quarter. That compares with the $5.46bn average estimate. Net profit was $626.3m, from $605.6m, a year earlier.

Full-year earnings, excluding some items, will be $1.68 to $1.70 a share, EMC said. In July, it predicted $1.70. Analysts project earnings of $1.72 a share on sales of $22bn.

“Economic and political uncertainties are affecting business confidence and this is affecting IT spending,” Mr Tucci said.

Despite uncertainties, Bob Savage, vice-president of EMC’s centre of excellence in Cork, paid tribute to the Irish workers who were building the future of the business.

“The innovative business our Irish workforce has helped to build is at the nexus of three top-trending themes in global IT — cloud, big data and trust.”

VMware, the software maker majority-owned by EMC, yesterday reported third-quarter profit that topped estimates as it gained corporate customers. VMware is the biggest maker of software that lets computers run multiple operating systems. Sales rose 20% to $1.13bn, matching analysts’ projections.

— Bloomberg

More in this section

News Wrap

A lunchtime summary of content highlights on the Irish Examiner website. Delivered at 1pm each day.

Sign up

Our Covid-free newsletter brings together some of the best bits from irishexaminer.com, as chosen by our editor, direct to your inbox every Monday.

Sign up