EMC outlook bright as revenue beats expectations

IT company EMC said its first quarter revenue beat forecasts as a rising number of customers invested in storage machines.

Revenue at the US tech giant, which employs 3,000 people in Ireland and has its centre of excellence in Cork, rose to $5.5 billion in the first three months of its financial year, a 2 per cent rise compared with the same period in 2013.

Adjusted earnings were 35 cents a share. Net income fell to $392 million, or 19 cents a share, from $580 million, or 26 cents, a year earlier. The company said it ended the first quarter with $15.3 billion in cash and investments.

The board said it had approved a 15 per cent increase in the quarterly cash dividend for shareholders, with the first increased dividend of $0.115 per share of common stock will be paid on July 23rd.

In the US, consolidated first-quarter revenue was flat year on year at $2.8 billion, while revenue from EMC's operations outside the United States increased to $2.6 billion, a 3 per cent year on year rise. Revenue from EMC's Europe, Middle East and Africa region grew 8 per cent.

Businesses are continuing to purchase EMC’s storage products, particularly its mid-priced machines and newer technologies such as those made by its Isilon unit, Daniel Ives, an analyst at FBR Capital Markets, wrote in a note to clients. EMC is trying to boost growth by focusing on newer areas such as flash-based storage, replacing storage machines with software and data-analysis programs, said Ives, who has the equivalent of a buy rating on the stock.

EMC's vice president and managing director of the centre of excellence in Cork Bob Savage said Ireland was a "strategic part" of EMC's global operation.

“The innovative business our Irish workforce has helped to build is at the centre of the major developments in global IT - cloud, big data and IT security,” he said.

The company currently exports to more than 140 countries from Ireland, and has signed up new customers such as Tullow Oil, United Drug, the HSE, Department of Education and Eircom.

Country manager for Ireland Gerry Murray said demand for new technologies was continuing to grow, boosting EMC's performance here.

Consolidated revenues for the global group in 2014 are expected to be more than $24.5 billion.

Additional reporting: Bloomberg