EMC said Thursday that third-quarter revenue was $1.26 billion, almost 4% higher than the $1.21 billion it made in the third quarter of 2001. Thanks partly to much lower cost of sales, from $984.5 million to $605 million, EMC reported net income of $21.3 million in the quarter, a complete turnaround from a loss of $945.2 million in the same quarter last year. Earnings were 1 cent per share, another quantum boost from the year-ago quarter, when EMC reported a loss of 43 cents per share.
EMC attributes the continued slowdown in sales to stagnant IT spending. But financial analyst Shebly Seyrafi at A.G. Edwards and Sons says EMC could still do better, just as competitors Hitachi Data Systems and IBM are growing in storage sales. "EMC isn't growing because of competition, product transition issues, and then IT spending," Seyrafi says. "Symmetrix (EMC's flagship system) is long in the tooth and customers are waiting for the refresh expected next year."