ILM Pays Off For EMC -

ILM Pays Off For EMC

Citing strong demand for its enhanced products and services, EMC said fourth-quarter earnings rose 46 percent to $321 million (13 cents per share), from $220 million (9 cents per share) in the fourth quarter of 2003.

The Hopkinton, Mass., information systems vendor also announced fourth quarter revenue of $2.36 billion, which was 27 percent greater than the $1.86 billion reported in the year-ago quarter.

EMC's storage hardware sales grew 15 percent to $1.1 billion in the quarter, led by its high-end Symmetrix systems. Small and medium-sized business customers helped the company's midrange Clariion system sales grow 46 percent.

The vendor said software license revenue grew 43 percent on sales of $410 million compared with the year-ago period, sparked by its acquisitions of Dantz, Documentum, Legato and VMware.

EMC, which reports results from its virtualization subsidiary separately from its other software offerings, said VMware posted record revenues of $71 million in the fourth quarter, an increase of 159 percent over VMware's results a year earlier.

The software division's success was the catalyst for EMC's services business, which increased 40 percent to $611.5 million in the fourth quarter. Customers solicited EMC's help to set up their information lifecycle management architecture.

EMC President and CEO Joe Tucci pointed to EMC's sixth consecutive quarter of double-digit revenue growth on a conference call Tuesday.

Calling 2004 an "exceptional year" for EMC, the executive said the company was able to extend its market and further its information lifecycle management (ILM) and virtual infrastructure strategies. In 2004, Tucci said, EMC accomplished goals of growing its top line 21 percent while elevating its operating margins from 9.1 percent in Q1 to 15.4 percent in Q4.

Tucci said IBM remains EMC's biggest competitor for its ability to bundle products and services, but he promised EMC would expand its share of what it anticipates will be a $51 million market opportunity. EMC plans to do this with regular 12-to-18 month product updates and new innovations.

The executive also said he expects 2005 will be a period of growth of between 7 and 8 percent. Terabytes on disk arrays will grow more than 70 percent, as will the market for server virtualization, he said.

Looking forward, Tucci said EMC expects earnings for the first quarter of 2005 to be between $2.23 billion to $2.25 billion, on EPS of 10 to 11 cents.

For the fiscal year, EMC posted 2004 revenue of $8.23 billion, nearly a third higher than the $6.24 billion reported in 2003. Net income for the full 2004 fiscal year grew 76 percent to $871 million, or 36 cents per share, compared with $496 million, or 22 cents per share, reported for fiscal year 2003.

Despite results and guidance that beat Wall Street forecasts, shares of EMC slipped 2% in Tuesday morning trading. Also heading lower were shares of Brocade , which fell 6% after the company restated previous results and promoted worldwide sales VP Michael Klayko to replace CEO Greg Reyes.

Article courtesy of Internet News

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