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Cloud Pushes EMC Profits Up 108%

Cash flow and net income hit record levels in the second quarter, as more of the world's data is stored in EMC's cloud.
EMC's second-quarter profits are in the cloud.

The company reported Wednesday that its net income and operating and free cash flow hit record levels. Year over year, net income was up 108% and consolidated revenue rose 24%.

With much of the world's IT operations shifting to cloud computing, EMC is storing much of the data making its way to the cloud. "The IT industry is in the midst of a major transformation to cloud computing and, ultimately, to a more agile way to consume and deliver IT," said Joe Tucci, EMC chairman and CEO, in a statement. "The strength and demand that we saw during the quarter is testament to the value our customers see in our information infrastructure and virtual infrastructure solutions."

EMC earned $426 million on revenue of $4.02 billion in the second quarter. The company, which describes itself as the world leader in information infrastructure solutions, predicted the rosy financial results would continue in the current quarter.

The firm's flagship storage solutions, including its Symmetrix and Clariion brands, rose more than 30% while sales at its VMware unit hit $673 million -- an increase of 48% over the previous year's quarter. EMC is the majority owner of VMware and the unit has been a key factor in EMC's partnership with Cisco, as the firms move more aggressively to provide solutions for data centers.

After noting that EMC has recorded three consecutive quarters of net income gains, Tucci defined the U.S. market as "good with good prospects" and Asian markets as "robust." He indicated Europe is a different story where EMC is seeing a "slowdown" in southern Europe. Even so, IT spending is still growing in Europe, he added.

EMC's CFO David Goulden also painted a rosy future picture. "Moving forward," said Goulden, who is also EMC executive VP, "we remain confident that we have the right business and operating model to continue delivering annual double-digit revenue and earnings growth over the long term."