EMC reports 5% rise in quarterly revenue

Wednesday 23 July 2014 14.59
EMC employs more than 3,000 people in Ireland
EMC employs more than 3,000 people in Ireland

EMC Corp, the world's largest data storage equipment maker, has reported a 5% rise in quarterly revenue, helped by sales of flash storage products and growth at its VMware virtualisation software unit.

Net income fell to $589 million, or 28 cents per share, in the second quarter ended 30 June from $701 million, or 32 cents per share, a year earlier.

Revenue rose to $5.88 billion from $5.61 billion.

EMC employs more than 3,000 people in Ireland, in Cork, Dublin and Belfast.

The company, under pressure from activist investor Elliott Management to boost shareholder returns, also accelerated its share buyback plan and raised its current-year profit forecast.

The company raised its share buyback plan to $3 billion from $2 billion for 2014 and said it expects to return more than $7 billion to shareholders over the course of 2013 and 2014 in the form of buybacks and dividends.

The Wall Street Journal reported on Monday that Elliott Management Corp had taken a $1 billion stake in EMC with the aim of pushing it to spin off its VMware virtualisation software unit.

"The share buyback increase is a positive, although I would have expected the full year EPS to be raised further given the EPS beat by 1c in Q2 and the reduction in shares due to the buyback," Macquarie Securities analyst Rajesh Ghai told Reuters.

"Although guidance was essentially in line with the Street, we would characterise the company's 2Q results as respectable for EMC," FBR Capital Markets analyst Daniel Ives said.

"(Results) should give investors some optimism that the company's next-generation data centre vision is starting to play out in the field."