EMC records third quarter results
Announcement posted by EMC 21 Oct 2004
Revenue tops US$2 billion; fifth consecutive quarter of double-digit growth
EMC Corporation today reported financial results for the third quarter of 2004, achieving its fifth consecutive quarter of double-digit year-over-year revenue growth.
Total consolidated revenue for EMC's third quarter was US$2.03 billion, 34 per cent higher than the US$1.51 billion reported for the third quarter of 2003. Net income for the quarter was US$218 million or US$.09 per diluted share, 37 per cent higher than the US$159 million or US$.07 per diluted share reported for the third quarter of 2003.
Joe Tucci, EMC's President and CEO, said, "We again achieved solid, balanced performance in a spending environment that continues to improve at a steady but modest pace. In each of the first three quarters of 2004, we have grown revenues almost three times faster than our overall addressable market. Clearly, our focus on information lifecycle management is influencing and improving how customers manage and store information, as well as setting the agenda for our industry as a whole."
Core EMC revenue, which excludes revenue related to EMC's Documentum, Legato and VMware acquisitions, grew 19 per cent compared with the third quarter of 2003. All of EMC's major geographies recorded double-digit core revenue growth, with each of EMC's international regions gaining more than 20 per cent.
Bill Teuber, EMC's Executive Vice President and Chief Financial Officer, said, "We have now met or exceeded our financial goals for eight consecutive quarters. During the third quarter, our gross and operating margins continued to expand, and our already strong balance sheet got even stronger. Cash and investments exceeded US$7 billion for the first time in the company's history while we remained active in the market, buying back US$108 million of our stock during the quarter. I am particularly pleased with the returns we are seeing from investments made to broaden our product portfolio and expand our customer reach, which have allowed us to penetrate more deeply into high-growth markets."
Third Quarter Highlights
EMC systems revenue grew 18 per cent compared with the year-ago quarter as customers of all sizes aligned the value of their information to platforms within EMC's expanded family of tiered information storage.
"Our commitment to developing the market's most economical, functionally rich mid-tier systems and software is clearly paying off," commented Tucci. "Our traditional enterprise customers, along with our rapidly growing base of small to medium-sized customers, are integrating these solutions into their ILM-enabled infrastructures. In the third quarter, our CLARiiON, Centera and NAS (network attached storage) businesses collectively grew well over 50 per cent."
EMC software license revenue increased 56 per cent compared with the same period a year ago, driven by the Documentum, Legato and VMware acquisitions and double-digit growth from sales of EMC's core storage software.
The newly formed EMC Software Group, which markets and develops platform-independent information storage and content management software, delivered consolidated revenues of US$351 million in the third quarter as customers around the world implemented EMC software to reduce costs, streamline complex IT operations and handle explosive data growth. The major components of EMC Software Group, including core EMC multi-platform software, Documentum and Legato, each had double-digit revenue growth in the third quarter over the comparable year-ago quarter.
VMware, an EMC subsidiary, delivered record quarterly revenues of US$61 million in the third quarter, an increase of more than 200 per cent over the third quarter of 2003. With the introduction of VMware ACE in the third quarter, VMware again demonstrated its relentless innovation and aggressive technology leadership. VMware solves the problems of efficiency, flexibility and security with its comprehensive solutions for servers, desktops and test and development that provide an easy on-ramp to next-generation computing models.EMC services revenue grew 48 per cent compared with the year-ago third quarter, due to the impact of EMC's software company acquisitions, increased core software maintenance revenue and continued customer demand for information lifecycle management solutions.
Business Outlook
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not include the potential impact of any mergers, acquisitions, divestitures or business combinations that may be completed after the date hereof. The business outlook set forth in EMC's news releases dated 22 January, 2004, 15 April 2004, 10 June, 2004 and 20 July, 2004 still represents EMC's current expectations unless specifically superceded by these or previously issued statements:
- Consolidated revenues for the fourth quarter of 2004 are expected to be between US$2.23 billion and US$2.27 billion.
- Diluted earnings per share for the fourth quarter of 2004 are expected to be US$0.11 to US$0.12.
About EMC
EMC Corporation (NYSE: EMC ) is the world leader in products, services and solutions for information storage and management that help organisations extract the maximum value from their information, at the lowest total cost, across every point in the information lifecycle. Information about EMC's products and services can be found at www.EMC.com/au
EMC, Documentum, LEGATO and VMware are registered trademarks, and EMC CLARiiON and EMC Celerra are trademarks of EMC Corporation. All other trademarks are the property of their respective owners.
This release contains "forward-looking statements" as defined under the Federal Securities Laws. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) risks associated with acquisitions and investments, including the challenges and costs of integration, restructuring and achieving anticipated synergies associated with the acquisitions of LEGATO Systems, Inc., Documentum, Inc. and VMware, Inc.; (iv) competitive factors, including but not limited to pricing pressures; (v) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (vi) component quality and availability; (vii) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (viii) insufficient, excess or obsolete inventory; (ix) war or acts of terrorism; (x) the ability to attract and retain highly qualified employees; (xi) fluctuating currency exchange rates; and (xii) other one-time events and other important factors disclosed previously and from time to time in EMC's filings with the U.S. Securities and Exchange Commission. EMC disclaims any obligation to update any such forward-looking statements after the date of this release.
Total consolidated revenue for EMC's third quarter was US$2.03 billion, 34 per cent higher than the US$1.51 billion reported for the third quarter of 2003. Net income for the quarter was US$218 million or US$.09 per diluted share, 37 per cent higher than the US$159 million or US$.07 per diluted share reported for the third quarter of 2003.
Joe Tucci, EMC's President and CEO, said, "We again achieved solid, balanced performance in a spending environment that continues to improve at a steady but modest pace. In each of the first three quarters of 2004, we have grown revenues almost three times faster than our overall addressable market. Clearly, our focus on information lifecycle management is influencing and improving how customers manage and store information, as well as setting the agenda for our industry as a whole."
Core EMC revenue, which excludes revenue related to EMC's Documentum, Legato and VMware acquisitions, grew 19 per cent compared with the third quarter of 2003. All of EMC's major geographies recorded double-digit core revenue growth, with each of EMC's international regions gaining more than 20 per cent.
Bill Teuber, EMC's Executive Vice President and Chief Financial Officer, said, "We have now met or exceeded our financial goals for eight consecutive quarters. During the third quarter, our gross and operating margins continued to expand, and our already strong balance sheet got even stronger. Cash and investments exceeded US$7 billion for the first time in the company's history while we remained active in the market, buying back US$108 million of our stock during the quarter. I am particularly pleased with the returns we are seeing from investments made to broaden our product portfolio and expand our customer reach, which have allowed us to penetrate more deeply into high-growth markets."
Third Quarter Highlights
EMC systems revenue grew 18 per cent compared with the year-ago quarter as customers of all sizes aligned the value of their information to platforms within EMC's expanded family of tiered information storage.
"Our commitment to developing the market's most economical, functionally rich mid-tier systems and software is clearly paying off," commented Tucci. "Our traditional enterprise customers, along with our rapidly growing base of small to medium-sized customers, are integrating these solutions into their ILM-enabled infrastructures. In the third quarter, our CLARiiON, Centera and NAS (network attached storage) businesses collectively grew well over 50 per cent."
EMC software license revenue increased 56 per cent compared with the same period a year ago, driven by the Documentum, Legato and VMware acquisitions and double-digit growth from sales of EMC's core storage software.
The newly formed EMC Software Group, which markets and develops platform-independent information storage and content management software, delivered consolidated revenues of US$351 million in the third quarter as customers around the world implemented EMC software to reduce costs, streamline complex IT operations and handle explosive data growth. The major components of EMC Software Group, including core EMC multi-platform software, Documentum and Legato, each had double-digit revenue growth in the third quarter over the comparable year-ago quarter.
VMware, an EMC subsidiary, delivered record quarterly revenues of US$61 million in the third quarter, an increase of more than 200 per cent over the third quarter of 2003. With the introduction of VMware ACE in the third quarter, VMware again demonstrated its relentless innovation and aggressive technology leadership. VMware solves the problems of efficiency, flexibility and security with its comprehensive solutions for servers, desktops and test and development that provide an easy on-ramp to next-generation computing models.EMC services revenue grew 48 per cent compared with the year-ago third quarter, due to the impact of EMC's software company acquisitions, increased core software maintenance revenue and continued customer demand for information lifecycle management solutions.
Business Outlook
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not include the potential impact of any mergers, acquisitions, divestitures or business combinations that may be completed after the date hereof. The business outlook set forth in EMC's news releases dated 22 January, 2004, 15 April 2004, 10 June, 2004 and 20 July, 2004 still represents EMC's current expectations unless specifically superceded by these or previously issued statements:
- Consolidated revenues for the fourth quarter of 2004 are expected to be between US$2.23 billion and US$2.27 billion.
- Diluted earnings per share for the fourth quarter of 2004 are expected to be US$0.11 to US$0.12.
About EMC
EMC Corporation (NYSE: EMC ) is the world leader in products, services and solutions for information storage and management that help organisations extract the maximum value from their information, at the lowest total cost, across every point in the information lifecycle. Information about EMC's products and services can be found at www.EMC.com/au
EMC, Documentum, LEGATO and VMware are registered trademarks, and EMC CLARiiON and EMC Celerra are trademarks of EMC Corporation. All other trademarks are the property of their respective owners.
This release contains "forward-looking statements" as defined under the Federal Securities Laws. Actual results could differ materially from those projected in the forward-looking statements as a result of certain risk factors, including but not limited to: (i) adverse changes in general economic or market conditions; (ii) delays or reductions in information technology spending; (iii) risks associated with acquisitions and investments, including the challenges and costs of integration, restructuring and achieving anticipated synergies associated with the acquisitions of LEGATO Systems, Inc., Documentum, Inc. and VMware, Inc.; (iv) competitive factors, including but not limited to pricing pressures; (v) the relative and varying rates of product price and component cost declines and the volume and mixture of product and services revenues; (vi) component quality and availability; (vii) the transition to new products, the uncertainty of customer acceptance of new product offerings and rapid technological and market change; (viii) insufficient, excess or obsolete inventory; (ix) war or acts of terrorism; (x) the ability to attract and retain highly qualified employees; (xi) fluctuating currency exchange rates; and (xii) other one-time events and other important factors disclosed previously and from time to time in EMC's filings with the U.S. Securities and Exchange Commission. EMC disclaims any obligation to update any such forward-looking statements after the date of this release.