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- 16 April 2004 10:15
EMC Reports First Quarter Results Revenue
FYI: Local EMC executive will be available for interview on Monday, 19th April upon request.
FOR IMMEDIATE RELEASE
EMC REPORTS FIRST QUARTER RESULTS REVENUE Up 35 per cent on Strong Demand for Expanded Product Portfolio, Impact of Recent Acquisitions
HOPKINTON, Mass. – 16 April, 2004 – EMC Corporation today reported strong, double-digit revenue growth and triple-digit net income growth on a year-to-year basis for the first quarter of 2004.
Total consolidated revenue for EMC's first quarter was $US1.87 billion, 35 per cent higher than the $US1.38 billion reported for the first quarter of 2003. Net income for the first quarter of 2004 was $US140 million or $US.06 per diluted share, including a charge of $US.01 per share, primarily related to the January 8, 2004, acquisition of VMware and certain additional restructuring charges. This compares with net income of $US35 million or $US.02 per diluted share for the first quarter of 2003.
Joe Tucci, EMC's President and CEO, said, "The first quarter marked EMC's highest revenue growth rate in nearly three years, measured with or without the inclusion of our recent acquisitions. This accelerating growth, which I believe is among the highest of any major IT supplier, is being fuelled by customers around the world embracing EMC technology that saves them money, simplifies their operations and protects their information assets. We are delivering the world's broadest lineup of storage and information management products and services, all focused on empowering organisations to get the maximum value from their information at every point in the information lifecycle."
Tucci continued, "EMC's new software divisions Documentum, LEGATO Software and VMware, also played an important role in the quarter as customers grappled with the explosion of digital content, continued the shift to disk-based recovery solutions and reaped the benefits of virtualised computing resources."
Global customer demand for EMC's expanded portfolio of information management and storage systems, software and services resulted in solid, double-digit revenue growth across each of EMC's businesses in the first quarter. Core EMC revenue, which excludes revenue from Documentum, LEGATO Software and VMware, grew approximately 21 per cent in the first quarter compared to the first quarter of 2003. EMC's new, independent software divisions performed well during the quarter, with Documentum, LEGATO Software and VMware, on a combined basis, growing their revenue more than 30 per cent compared with the first quarter of 2003. Consolidated international revenue, benefiting from EMC's continued focus and investment in Europe, Asia and Latin America, represented 43 per cent of EMC's first-quarter revenues, compared with 37 per cent for the year-ago quarter.
Bill Teuber, EMC's Executive Vice President and Chief Financial Officer, said, "EMC finished the first quarter with $US6.7 billion in cash and investments, after investing nearly $US600 million on the acquisition of VMware and our stock buyback program. In addition to providing EMC with needed agility to react to future opportunities, a portion of these funds will be used to strengthen our new software divisions, deepen our penetration in the commercial market, expand further into promising regions in Asia and Eastern Europe, enhance EMC's own information infrastructure, and continue to evolve 'EMC' into one of the world's most powerful and recognised technology brands."
First Quarter Highlights
EMC information storage systems revenue, bolstered by a sweeping wave of first quarter enhancements and innovations across the entire lineup of EMC tiered networked storage platforms, grew 19 per cent compared to the year-ago quarter. Core EMC information storage software revenue increased 26 per cent compared to the same period a year ago. First-quarter software highlights included the introduction of the EMC DatabaseXtender software suite, which monitors database growth and usage and intelligently relocates inactive data to various EMC or non-EMC storage systems. Core EMC services revenue grew 23 per cent compared to the year ago quarter, due to growing demand for information lifecycle management services and an increase in software maintenance revenues. EMC also broadened the global reach of EMC information storage and management products during the quarter by forming new distribution relationships with TechData in the U.S. and Samsung Electronics in Korea.
Documentum, acquired by EMC in December 2003, delivered its sixth consecutive quarter of record revenues and added more than 100 new customers in the first quarter. Documentum announced the first and only complete virtual repository solution enabled in part by technology acquired from Xerox Corporation in March, and two new compliance products to help organisations address regulatory and business requirements. Documentum also successfully demonstrated the mainframe-level performance and scalability of the Documentum 5 ECM platform with a billion-object repository benchmark.
LEGATO Software, acquired by EMC in October 2003, delivered its best first quarter revenues ever and added more than 300 new customers. During the quarter LEGATO improved the heterogeneous storage integration and support of the LEGATO DiskXtender 2000 software and partnered with Microsoft and EMC to develop a joint data consolidation and business continuity solution. Also during the quarter, LEGATO tightened integration between LEGATO DiskXtender and EmailXtender products with EMC Centera and LEGATO NetWorker software with EMC CLARiiON to answer customer need for comprehensive email compliance and backup-to-disk solutions.
VMware, acquired by EMC in January 2004, exceeded revenue expectations during its first quarter as an EMC subsidiary, posting record revenues and triple-digit growth as customers turned to VMware technology to consolidate server and workstation operations. VMware continued to advance the virtualisation industry with new releases of its server virtual infrastructure software. Also during the quarter, VMware strengthened its relationship with Dell through a new agreement, evidence that VMware's value is resonating with partners and their customers.
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not include the potential impact of any mergers, acquisitions, divestitures or business combinations that may be completed after the date hereof. The Business Outlook set forth in EMC's news release dated January 22, 2004, still represents EMC's current expectations unless specifically superseded by these statements:
· Consolidated revenues for the second quarter of 2004 are expected to be between $US1.950 billion and $US1.975 billion.
· Diluted earnings per share for the second quarter of 2004 are expected to be $US0.08.
· Gross margins should exceed 50 per cent for 2004.
· Selling, general and administrative expenses, as a percentage of revenue, should be between 26 per cent to 29 per cent for 2004.
· Research and development expenses, as a percentage of revenue, should be between 11 per cent to 12 per cent for 2004.
· Operating income, as a percentage of revenue, should reach the mid-teens by the fourth quarter of 2004.
EMC Corporation is the world leader in information storage systems, software, networks and services, providing automated networked storage solutions to help organisations extract the maximum value from their information, at the lowest total cost, across every point in the information lifecycle. Information about EMC’s products and services can be found at www.EMC.com.
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EMC is a registered trademark, and Centera, EmailXtender and DiskXtender are trademarks of EMC Corporation. Other trademarks may be the property of their respective owners.
This release contains “forward-looking statements” as defined under the Federal Securities Laws. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) risks associated with acquisitions and investments, including the challenges and costs of integration, restructuring and achieving anticipated synergies associated with the acquisitions of LEGATO Systems, Inc., Documentum, Inc. and VMware, Inc.; (iv) competitive factors, including but not limited to pricing pressures; (v) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (vi) component quality and availability; (vii) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (viii) insufficient, excess or obsolete inventory; (ix) war or acts of terrorism; (x) the ability to attract and retain highly qualified employees; (xi) fluctuating currency exchange rates; and (xii) other one-time events and other important factors disclosed previously and from time to time in EMC’s filings with the U.S. Securities and Exchange Commission. EMC disclaims any obligation to update any such forward-looking statements after the date of this release.
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