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EMC Reaffirms Q2 EPS Forecast

Quoting from RTTNews

On Wednesday, EMC Corp.announced that over the next several years, it expects to continue to deliver double-digit revenue growth from information storage solutions, while growing five important emerging technologies into billion-dollar businesses. The company provided this detail at its annual strategy update to investors, analysts, and journalists. At the meeting, EMC executives reviewed the company's evolving business model and expanding portfolio of information infrastructure solutions for delivering information lifecycle management and virtual infrastructure.

The Hopkinton, Massachusetts-based company engaged in the development and deliver of information infrastructures worldwide said it believes that IT infrastructures are at the beginning of a significant transformation, from being static and platform centered to dynamic and service oriented.

EMC outlined five business areas within its portfolio that could each reach the billion-dollar level within the next several years: content management, resource management, storage virtualization, security and VMware, the EMC subsidiary engaged in virtual infrastructure software. These billion-dollar opportunities will be a result of both organic growth and new acquisitions, and, over the next several years, will help drive EMC's double-digit revenue growth, the company noted.

Mark Lewis, EMC's Executive Vice President and Chief Development Officer, described the next generation of IT and detailed "game-changing" technology developments that will underpin future data centres, including information-centric IT and security, and services-oriented infrastructures.

Diane Greene, President of VMware, outlined where virtual infrastructure is going. Green stated that with its technology, VMware is ushering in a new era by taking the complexity out of IT infrastructure, adding flexibility, and offering customers significantly better returns on their investments. Greene described VMware Infrastructure 3. Shipping this month, the VMware Infrastructure 3 suite is the first truly distributed system, making the promise of utility computing real for customers around the world.

In addition, EMC reiterated that consolidated revenues for the second quarter of 2006 are expected to be at least $2.66 billion. GAAP earnings per share for the second quarter are expected to be $0.13, while Non-GAAP earnings per share, excluding stock-based compensation and intangible amortization, are expected to be $0.17.

On an average, twenty analysts polled by First Call/ Thomson Financial expect the company to report earnings of $0.16 per share for the second quarter. Twenty-three analysts have a consensus revenue estimate of $2.68 billion for the quarter.

Consolidated revenues for 2006 are expected to be between $11.1 billion and $11.3 billion, the company stated. EMC noted that current expectations are for revenues to be at the lower end of that range. GAAP earnings per share for 2006 are expected to be between $0.54 and $0.57, while Non-GAAP earnings per share, excluding stock-based compensation and intangible amortization, are expected to be between $0.70 and $0.73.

Twenty analysts have an earnings consensus of $0.69 per share for the full year, while twenty-five analysts expect revenues of $11.08 billion for the year.

For its recently completed first quarter, EMC stated that earnings inched up 1% from a year ago, but the absence of stock-options expenses in the year-ago period queered the comparison. EMC earned $272.5 million or $0.11 per share, in the first quarter, compared with $269.8 million or $0.11 per share, a year ago.

Excluding stock-based compensation and other items, EMC stated that it earned $380.3 million or $0.16 per share, in the first quarter, compared with $296.6 million or $0.12 per share, last year. EMC's revenue rose 14% from a year ago to $2.55 billion, about $30 million short of estimates. Systems revenue in the first quarter was $1.23 billion, a 20% increase over the year-ago quarter.

EMC is currently trading at $12.19, down 16 cents or 1.30%.

Published Thursday, June 08, 2006 6:43 AM by David Marshall
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