EMC Continues Record Revenue Streak
EMC (NYSE: EMC) today announced all-time record Q3 revenue, 58 percent profit growth, record year-to-date operating and free cash flow, and substantial margin expansion. As a result, EMC increased its earnings expectations for 2010 as it now expects consolidated revenues of $16.9 billion.
All in all, EMC met analyst estimates. For the third quarter, consolidated revenue was $4.21 billion, an increase of 20 percent compared with the year-ago quarter. Non-GAAP net income attributable to EMC for Q3 was $649.4 million, an increase of 35 percent a year ago and non-GAAP earnings per diluted share were $0.30, a 30 percent increase year over year.
EMCs execs point to the cloud as the main driver of its growth. In a statement, David Goulden, EMCs executive vice president and CFO, said, For the third consecutive quarter EMC achieved our triple play we gained market share, invested aggressively to capitalize on the shift to cloud computing, and increased profitability. Cloud computing is driving a fundamental change in the way IT is designed and managed, represents a massive opportunity, and is happening now in various phases across the globe.
The high-end portfolio is still on the grow. The EMC Symmetrix storage product portfolio increased 23 percent compared with the year-ago quarter, while its mid-tier storage product portfolio grew revenue 22 percent year over year.
Revenue from EMCs RSA information security business grew 22 percent year over year, and VMware (NYSE: VMW), which is majority-owned by EMC, increased revenue 46 percent.
Additionally, EMC cited strong customer demand for EMCs backup and recovery products as part of the companys Backup and Recovery Systems Division, and a number of significant new customer wins with EMCs Information Intelligence solutions. Also of note, EMC completed its acquisition of data warehousing and business analytics vendor Greenplum, forming the foundation of the companys new Data Computing Products Division and launching a new database appliance that competes directly with Oracles Exadata Database Machine.
Going forward, EMC expects consolidated revenues of $16.9 billion, $0.91 in consolidated GAAP diluted earnings per share, and $1.25 in consolidated non-GAAP diluted earnings per share for 2010.
Total non-operating expense, which includes investment income, interest expense, and other expense, is expected to be $80 million in 2010, while the total weighted average diluted outstanding shares for 2010 are expected to be 2.14 billion.
EMC expects to repurchase up to $1 billion of the companys common stock in 2010.
EMC is reportedly in talks to acquire scale-out storage specialist Isilon Systems for a rumored $2 billion. According to the New York Post, a source has claimed that the Isilon deal will be done before the year is out.
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