EMC profits jump by 58%

EMC, the world’s biggest maker of storage computers, said third-quarter profit rose 58% on rising demand for storage and security products.

Net income advanced to $472.5 million (€345m), or 22 cents a share, EMC said. Excluding some costs, profit was 30 cents a share, matching the average of analyst estimates compiled by Bloomberg. Sales rose 20% to $4.21 billion, beating the $4.14bn average projection.

EMC raised its full-year profit and sales forecasts. The firm is benefiting as companies use its products to store and secure information on remote computers, rather than on the desktop, said Piper Jaffray & Co analyst Troy Jensen. That method, known as cloud computing, lets customers use the Internet to access the data.

“There’s huge initiative to shrink your data centres and save energy,” said Jensen, who rates the shares “overweight” and doesn’t own them. “There’s a lot of spending in that space right now.”

Jensen said EMC’s earnings may be overshadowed by contracts reported yesterday by VMware, a software maker that’s majority-owned by EMC. VMware shares fell 6.7% after the company posted bookings that missed analysts’ estimates. VMware also reported profit and sales that topped estimates.