Cost Cutting Helps EMC Post Profit
As some evidence that itsa cost-cutting efforts have paid off, EMC Wednesday reported a profit of $35 million, or two cents per share, compared to a loss of $77 million, or 3 cents per share this time a year ago.
Revenue totaled $1.38 billion, a six percent gain over the with $1.3 billion reported a year earlier. The Hopkinton, Mass. storage provider, which pared its workforce by 1,350 last fall to cut costs, said its first quarter results also reflect growth in customer adoption of its new, high-end storage products, such as the Symmetrix DMX system.
DMX sales accounted for more than half of total Symmetrix systems sales, and revenue from information storage services grew 28 percent in the first quarter compared with the first quarter of 2002. CLARiiON CX series of networked storage systems and software also sold well.
The news is encouraging considering the company's $118.7 million loss in 2002, attributed to weak demand in a soft economy. A confident EMC President and CEO Joe Tucci said in a public statement the "product innovation engine at EMC is running in overdrive."
"We continue to earn the confidence of new and existing customers by delivering market-leading price/performance through the broadest portfolio of storage platforms, software and services in EMC's history," Tucci said. "As a result, I believe we again gained market share during the first quarter."
That is important market share, as EMC is itching to regain some thunder which IDC said was stolen by HP and IBM last year in the high-end systems space. EMC is still the storage management software leader, according to new research from Gartner, which said EMC held a 25.6 percent market share in 2002, compared to Veritas Software's 18.6 percent.
Moreover, EMC is the leader in storage resource management (SRM) software, a niche composed of software automation and reporting tools that was the fastest-growing segment of the storage management software market last year.
Looking forward, EMC expects second quarter revenue to be between $1.425 billion and $1.475 billion, with earnings per share of 3 cents.