Shares in EMC have fallen after Q3 profit fell short of analysts’ estimates and the company cut sales and earnings forecasts for the year amid a drop in US government spending.
EMC, which employs 3,000 people in Co Cork, saw its third-quarter sales fall short of its own forecasts, hurt by weaker US government sales and some orders that came in late in the quarter.
The US government generates 8% of EMC’s revenue, according to a report by Barclays Plc.
For the third quarter, profit before some costs was 40 cents a share, EMC said in a statement.
Analysts predicted 45 cents on average, according to data compiled by Bloomberg.
Sales were $5.54 billion, compared with analysts’ average projection of $5.8 billion.
The US government shortfall is a concern because the third quarter is typically the “biggest and most important” for these customers, Chief Financial Officer David Goulden said.
Spending from that area decreased “significantly” compared with the year-ago quarter, after being unchanged in the first half of the year, he said.
EMC, based in Hopkinton, Massachusetts, forecast full-year sales of $23.25 billion and adjusted profit per share of $1.80. The company in July had projected revenue of $23.5 billion and profit of $1.85 a share.
The company said in March that it will boost revenue by at least 8% a year and profit will rise 10% annually through 2016 as market share increases.
Sales will exceed $30 billion in 2016, Goulden said at the time.
While missing estimates, EMC’s earnings did get a boost from results at majority-owned VMware Inc.
VMware, a Palo Alto, California-based maker of software that lets computers run multiple operating systems, reported profit that exceeded analysts’ projections as corporate customers renewed licensing deals, sending shares up 4.6% to $86.45.
Profit before certain items was 84 cents a share in the third quarter, and revenue rose 14% to $1.29 billion, VMware said yesterday in a statement.
