Inventory woes hit EMC profits
Gear shift slippage
Inventory problems have pushed down profits at storage powerhouse EMC despite increased quarterly sales. For the quarter ending 30 June (Q206), EMC recorded sales of $2.57bn, 10 per cent higher than the $2.34bn it posted over the same quarter last year. EMC's net income for Q206 fell to $279m from $293m in Q205.
EMC warned on Monday that revenues would come up under its previous estimate of $2.66bn, mainly because of problems meeting stronger-than-expected demand for its new Symmetrix DMX-3 storage system.
"While our execution was not up to our own high standards, business and customer demand for our products and solutions remain strong," EMC chairman, president, and chief executive officer Joe Tucci said. Tucci singled out strong demand for VMware virtual infrastructure software and EMC Documentum content management software as highlights of the quarter.
EMC predicts that Q306 revenues will peg out at around $2.66bn, excluding the impact of its planned acquisition of RSA Security, with sales for the year of approximately $10.8bn. ®