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EMC revenues steady but profits down

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EMC reported steady third quarter 2009 revenues of $3.52bn but profits fell 24 per cent compared to a year ago.

The 2008 third quarter revenue number was five per cent down on 2008's third quarter but 8 per cent up on the second 2009 quarter. Net income was $298.2m, an impressive 45 per cent higher than the second quarter but almost 25 per cent less than the year-ago quarter's $393.4m, though still beating Wall St estimates.

Notwithstanding the diminished profit, EMC CEO and chairman Joe Tucci said he was "extremely proud of the EMC and VMware people around the world who achieved these results."

CFO David Goulden said: "EMC achieved solid sequential revenue and profit growth." But he didn't mention the year-on-year comparison in his prepared remarks. The recession is still clearly affecting EMC.

EMC’s Information Infrastructure business for the third quarter, meaning Information Storage, RSA Security, and Content Management and Archiving, recorded $3.03 billion in sales, an increase of 8 per cent sequentially. The company said it was driven by good sequential growth of Symmetrix arrays with strong adoption of the new V-Max line. It also saw good business in the backup and recovery, and Celerra product areas.

EMC majority-owned VMware contributed revenue of $489m.

During the third quarter EMC bought data indexer Kazeon and FastScale, recruited Intel's Pat Gelsinger to head its storage operations, uprated Data Domain's replication and refreshed its mid-range boxes, as well as getting more closely involved with Cisco. It also introduced its Atmos compute cloud service. By EMC standards, it was just another quarter really.

EMC is betting big, really big, on virtualisation and the cloud. If these bets come off then it could resume its previous hectic growth rates, once the recession eases into recovery and recovery turns to economic growth. Not quite yet though although the recession is easing.

Tucci pointed out that EMC's "customers are signaling more comfort spending their IT budgets" and the outlook for the year has been raised over previous expectations. Consolidated EMC revenues of $4.0bn are expected for the fourth quarter with $13.9bn for the full year. ®

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