EMC exceeds expectations in Q4, restructuring ahead

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By Emily Micucci

Hopkinton-based EMC Corp. reported quarterly and yearly revenue and income growth in the fourth quarter ending Dec. 31 in an earnings statement released Wednesday, one day after management approved a restructuring plan which includes a workforce reduction.

Fourth-quarter revenue was $6.7 billion, up 11 percent compared to a year ago, resulting in net income of $1 billion, an annual increase of 17 percent, according to EMC. Earnings per share increased 11 percent year over year, to 60 cents per share.

Meanwhile, full-year revenue was $23.2 billion, an increase of 7 percent over 2012. EMC reported annual net income of $2.9 billion, a six-percent year-over-year increase.

Leading yearly revenue growth were EMC’s information infrastructure business, which grew 5 percent in 2013, and 15-percent revenue growth for both VMware and Pivotal, company subsidiaries.

Fourth-quarter results exceeded analyst expectations, which predicted EMC would produce earnings of 59 cents per share on earnings of $6.6 billion. But EMC's projected earnings for the first quarter of 2014 fall below analyst estimates, with the company forecasting earnings of 35 cents per share compared to an average analyst expert of 43 cents per share, according to Bloomberg News.

The restructuring plan is expected to cost EMC as much as $120 million, according to an SEC filing, and will result in cash payments of between $95 million and $114 million.

The plan involves a "reduction of force," according to the company, and it will be mostly complete by the end of the first quarter. However, EMC will finish 2014 with roughly the same number of employees, or slightly more, according to a report by Bloomberg.

“Despite 2013 IT spend growth that was lower than we expected, EMC achieved strong revenue and profit growth. This outperformance relative to our industry speaks to the power of the EMC portfolio, solid operational and financial model and consistent execution against our strategy,” David Goulden, chief financial officer for EMC, said in a statement.