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EMC's Q2 Profits Fall 75%

In recent quarters, EMC has been downright Reaganesque. Despite the chaos around it, the data storage giant exuded confidence about the future and the company's role in it.

But that optimism faded, at least a little today, as the Hopkinton, Mass., company posted second quarter earnings 75 percent below the same period last year, and brooded over prospects for a quick recovery.

"I cannot recall a more difficult environment in terms of technology spending than the one that has unfolded over the past few months," Mike Ruettgers, EMC's chairman said in a statement. "It is now expected that IT spending may shrink on a year-to-year basis for the first time in decades."

EMC reported earnings of $109 million, or 5 cents per share, off from 19 cents per share from last year's second quarter. The most recent numbers include a charge of 1 cent per share for restructuring. Revenue was $2.02 billion, down 6 percent, as the company cut prices on some of its products to spur demand. Results met lowered guidance issued earlier this month.

"I cannot recall a more difficult environment in terms of technology spending than the one that has unfolded over the past few months," said Mike Ruettgers, EMC's chairman.

EMC CEO Joe Tucci said the company has cash and investments worth $4.9 billion at the end of the quarter. It will use that war chest to continue investing in research and development while "continuing to attack unnecessary costs." No specific reference was made to layoffs however.

"Our strategy is aimed squarely at longterm profitable growth and market leadership," Tucci said. "When the fog lifts, EMC's technological stature and market leadership will be stronger than ever."

Shares of EMC slumped 0.74, or 4 percent, to 19.65 in morning trading. The level marks a 52-week low for the stock which has traded as high as 104.9375 in the last year.