EMC revenue growth led by Pivotal, VMware
Hopkinton-based EMC Corp. posted a 5-percent increase in revenue in the second quarter, or $5.9 billion, led by strong growth in its Pivotal and VM Ware businesses.
Pivotal Software, a platform-as-a-service company that serves larger businesses, saw revenue increase 29 percent in the second quarter that ended June 30, while revenue for cloud services provider VMware was up 17 percent year over year.
Meanwhile, EMC Information Infrastructure, the company’s main business unit, saw more modest revenue growth of 1 percent in the quarter.
“EMC performance in (the second quarter) was quite solid and on track, with good performance from each of our major business units. We are at the threshold of expansive opportunity and remain confident about the rest of the year, as evidenced by the accelerated (stock) buyback program,” CFO David Goulden said in an earnings statement, referencing the company’s plan to buy back $3 billion in stock, up from $2 billion. EMC said it plans to return more than $7 billion to shareholders by the end of this year.
News of strong growth in its VMware unit comes as an activist investor, Elliott Management Corp., is pushing for EMC to sell VMware as a way to restructure the company, the Wall Street Journal reported. Elliott officials reportedly plan to meet with EMC CEO Joseph Tucci to discuss their proposal.
While revenue rose in the second quarter, net income declined to $589 million, compared with $701 million a year earlier, resulting in earnings of 28 cents per share.
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