Storage giant EMC reported a rocketing profit of $140 million, or 6 cents per share for its first quarter of 2004, quadrupling its net income of $35 million, or 2 cents per share, from the same first quarter of 2003.
The first quarter earnings announced today beat Wall Street’s estimates by a penny.
The Hopkinton, Mass., company’s results came on year-over-year revenue growth of $1.87 billion for the first quarter of 2004, up by 35 percent from the $1.38 billion in revenue it reported for the first quarter of 2003. Across-the-board enhancements to its storage products and strong performances from acquisitions sparked the results.
EMC revenue, excluding sales from its freshly-integrated Documentum, LEGATO Software and VMware acquisitions, grew roughly 21 percent over last year. The three software divisions combined grew their revenue more than 30 percent.
The results, EMC’s best in almost three years, reflect how hardware and software sales in the storage space are heating up, thanks in large part to an explosion of data and government record retention regulations forcing customers to buy more storage and products.
EMC, which competes with IBM, HP
and VERITAS Software,
is taking advantage of this buy getting customers to place trust in its information lifecycle management (ILM) strategy for managing information from its creation to its disposal. Acquisitions of Legato, Documentum and VMware bolstered EMC’s ILM offering
and the company’s first-quarter earnings, according to EMC President and CEO Joseph Tucci.
“EMC’s new software divisions Documentum, LEGATO Software and VMware, also played an important role in the quarter as customers grappled with the explosion of digital content, continued the shift to disk-based recovery solutions and reaped the benefits of virtualized computing resources,” Tucci said in a public statement.
EMC said its storage systems revenue grew 19 percent compared to the year-ago quarter, owing to the company’s broad product enhancements to its Symmetrix, Clariion and Centera systems, as well as software additions such as DatabaseXtender. Services revenue grew 23 percent compared to the year ago quarter, due to strong demand for ILM services.
Acquired
in December 2003, content management specialist Documentum added more than 100 new customers in Q1. LEGATO, an archiving company acquired
in October 2003, delivered its best Q1 revenues ever and added more than 300
new customers. Server virtualization concern VMware, purchased
in January 2004, exceeded revenue expectations during its first quarter as
an EMC subsidiary.
EMC’s Executive Vice President and CFO Bill Teuber said EMC finished the
first quarter with $6.7 billion in cash and investments, after investing
nearly $600 million on the acquisition of VMware and stock buyback program.
Looking forward, EMC said it expects sales in the second quarter to be between $1.95
billion and $1.975 billion with earnings per share of 8 cents.
