EMC, the world's biggest maker of storage computers, reported a 28 per cent gain in first- quarter profit today as companies increased spending on data centres capable of delivering tasks through the Internet.
Net income rose to $477.1 million, or 21 cents a share, from $372.7 million, or 17 cents, a year earlier, the company said in a statement.
Excluding some
items, profit of 31 cents met the average of analysts' estimates compiled by Bloomberg.
EMC, like Intel and International Business Machines, is benefiting from corporations' need to upgrade their systems after holding off during the recession.
In January, Hopkinton, Massachusetts-based EMC unveiled more than 40 storage products and technologies to capture part of that boom. "We're in the early innings of a major refresh cycle, where EMC is in the driver's seat," said Daniel Ives, a New York-based analyst at FBR Capital Markets who rates the shares "outperform."
"For a few years companies were in a bunker mentality. Now you're seeing wallets get bigger, issuing a lot more" information technology spending. Sales rose 18 per cent to $4.61 billion last quarter, exceeding the $4.5 billion average estimate. EMC reiterated its full-year profit forecast of $1.46 a share, excluding some items.
Analysts on average estimate $1.48.
EMC rose 96 cents, or 3.6 percent, to $27.68 at 10:46 a.m. in New York Stock Exchange composite trading. The shares climbed 17 percent this year before today.