Citing a "a very tough economy," EMC Thursday reported first-quarter earnings that showed a 23 per cent drop in profits and a 9.2 per cent fall in revenue.
Revenues fell from US$3.47 billion to $3.15 billion, while net income plummeted from $251.6 million to $194.1 million compared with the same quarter a year ago. EMC's Information Infrastructure business revenue for the first quarter, which includes Storage, RSA Security, and Content Management & Archiving, was $2.7 billion -- down $300 million year over year.
EMC CEO Joe Tucci said even with the dramatic revenue drop, the company executed its business strategy to reduce expenses and grow sales within "a very tough economy." Tucci said he expects IT spending to improve in the second half of 2009 as companies move along in their restructuring programs and the federal government's stimulus packages takes affect.
"As we look to the balance of 2009, we believe the global IT spending environment has reached -- or is very near -- the bottom," he said in a statement released this morning.
One of the few bright spots was EMC's VMware subsidiary, which showed a 7.4 per cent increase in first quarter revenue compared with the same period last year for a total of US$470.4 million. The Hopkinton, Mass.-based company also reported that it has record cash and investments amounting to $9.8 billion.
In January, EMC announced plans to lay off 2,400 employees or about 7 per cent of its total work force, which, along with other restructuring, is expected to save the company about US$500 million annually beginning in 2010.
EMC did not offer revenue or any other financial outlook citing the current "macro economic conditions."
Looking ahead, Tucci said EMC will focus on products that support and promote market strategies, such as the virtual data center and cloud computing. EMC recently announced a new version of its EMC introduces x86-based Symmetrix array for cloud storage, which moved away from its proprietary, monolithic past with a more modular architecture based on Intel's x86 multicore processor and tightly integrated with VMware's APIs, enabling it to more seamlessly support virtual server environments.