|
EMC warns about 1Q
|
 |
April 11, 2001: 10:50 a.m. ET
Storage network provider blames slowing economy for missing estimates
|
NEW YORK (CNNfn) - Leading Internet network storage provider EMC Inc. warned Wednesday that first-quarter earnings would fall short of Wall Street forecasts, blaming tightening customer spending in the face of an economic slowdown.
EMC (EMC: down $1.90 to $32.50, Research, Estimates) said it now expects to post first-quarter earnings of 18 cents a share, more than the 15 cents it earned a year earlier, but 2 cents shy of analysts' 20 cents a share forecast, according to First Call, which tracks corporate earnings.
Total consolidated revenue grew 29 percent in the quarter. EMC had warned in February that it expected revenue growth of 25 percent to 35 percent, down from its previous 33 percent to 38 percent forecasts.
 The company also expects to report total revenue for its core storage business increased 37 percent in the quarter.
Executive Chairman Mike Ruettgers said he expects customer spending to improve coming out of the first quarter as businesses have reduced growth expectations and budgets.
Bill Teuber, the company's chief financial officer, said he believes EMC can continue to grow at more than double the rate of overall information technology spending for 2001.
"We are confident that we can do this profitably and gain market share," Teuber said, adding that he expects modest earnings per share growth in 2001.
Analysts on average are forecasting 2001 earnings of 94 cents a share for the company, according to First Call.
Technology companies such as EMC have been taking it on the chin lately. Decreasing demand has left their customers with bulging inventories, forcing them to cut back on orders for things such as computer chips and network storage services.
CLICK HERE to view other technology stocks
"They tried to hold it together, and found ultimately they couldn't," Wit SoundView analyst Gary Helmig told Reuters news service Wednesday. "It's curious they just woke up to this level of miss. They're blaming the economy, but competition is a much underrated factor."
EMC rival Hitachi Ltd., Japan's biggest electronics company, had "a very strong" first quarter, Helmig said. "If Hitachi didn't have this strength, EMC would not have this problem."
Separately, EMC said Wednesday it has acquired FilePool NV, a venture-backed software development company based near Brussels, for about $50 million in cash. 
|
|
|
|
|
 |
|
