EMC stock rises despite lower outlook for '15
Stock in EMC Corp. of Hopkinton rose more than 3 percent Wednesday despite a lowered revenue outlook for 2015 from the data-storage giant in a report of its first-quarter numbers.
EMC reported first-quarter revenue of $5.6 billion, up 2 percent over last year and “broadly” in line with its expectations, according to a statement from the company. However, its net income of $252 million, or 13 cents per share, fell from $392 million (19 cents) over last year.
In the company’s statement, Chairman and CEO Joe Tucci said geopolitical factors in Russia and China and “not executing as crisply as we had expected” caused EMC to fall short on its storage revenue.
But Tucci said EMC expects to make its revised annual revenue target of $25.7 billion, down from its earlier estimate of $26.1 billion.
“Our investments in high-growth areas are bearing fruit,” he said, adding that the company is picking up more “large, multinational customers with the capabilities needed to build their digital agendas and undergo massive IT transformations.”
The results were announced nearly three hours before the stock markets opened Wednesday. By the end of trading, EMC’s stock had risen 3.1 percent, to $27.13.
The largest revenue increases during the quarter for EMC came out of its Pivotal and VMWare divisions, which saw jumps of 10 and 12 percent, respectively. EMC has faced pressure within the past year by investor Elliott Management Corp. to spin off VMware, its virtualization business, and perhaps other holdings.
EMC bought VMware in 2004 and holds 80 percent of its stock. The subsidiary has been growing considerably faster than the parent company, with revenues rising 16 percent over the past year compared with 2 percent for EMC's core information infrastructure business.
In its last quarterly report, EMC said its revenue fell short of expectations in part because of shifts in currency exchange rates because of a stronger U.S. dollar. It also said it would cut an unspecified number of jobs this year.
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