EMC Reports Solid 1Q Results

EMC Corp. Tuesday reported that sales in its first quarter ended March 31 grew 20% year over year to $2.24 billion, causing earnings to soar 94% to $269.8 million or 11 cents per share. The company's results were in stark contrast to IBM, Siebel Systems, and other IT vendors that reported a sudden slowdown in sales in the first quarter.

"We, too, saw a slow February. But activity picked up nicely in March, especially in the last three weeks of the quarter, and especially in the United States," said Joe Tucci, EMC president and CEO, in a teleconference Tuesday.

Last week, IBM said its revenue grew a paltry 1% in the March quarter, excluding currency gains, and that cuts in services employees and organizational changes may follow. Earlier this month, Siebel said it expects to report a $7 million loss on sagging sales when it releases its first-quarter results April 27.

EMC reported growth across all of its product lines. Systems sales increased 15% year over year to $1.03 billion while software license and maintenance sales grew 26% to $832 million. Revenue from professional services, systems maintenance, and other services also increased 26% to $375 million during the quarter.

Sales of storage and management software, including SAN Management and StorageScope products, rose 21% to $147 million in the quarter, while data backup and archiving products from EMC's Legato and Dantz product lines increased 36% to $52 million. Sales of Documentum content-management software rose 36% to $49 million, and sales of the vendor's VMware product soared 104% to $80 million.

For the second quarter, EMC expects revenue in the range of $2.33 billion to $2.36 billion and earnings of 12 cents.