EMC Corp. (EMC:US), the world’s biggest maker of storage computers, said first-quarter profit rose 23 percent as companies housed increasing volumes of data and purchased more software from majority-owned VMware Inc. (VMW:US)
Net income (EMC:US) advanced to $586.8 million, or 27 cents a share (EMC:US), from $477.1 million, or 21 cents, a year earlier, the Hopkinton, Massachusetts-based company said today in a statement. Excluding some items, profit was 37 cents, compared with the 36-cent average of analysts’ estimates (EMC:US) compiled by Bloomberg.
EMC is benefiting as customers buy more of its storage software, including products from the Isilon unit it acquired in 2010 in its biggest-ever acquisition, Alex Kurtz, an analyst at Sterne Agee, said in a note last week. EMC said it will “meet or potentially exceed” its prior full-year 2012 forecasts for revenue and profit.
“Investors had hoped for a potential raise,” in the 2012 forecast, said Mark Moskowitz, an analyst at JPMorgan & Chase Co. in San Francisco, in a report today. “No change to outlook could be a jump ball.”
EMC’s shares fell 3.7 percent to $28.07 at 9:56 a.m. in New York, after earlier touching $27.86 for the biggest decline since Dec. 21 They had risen 35 percent this year before today.
The company in January forecast (EMC:US) of full-year 2012 revenue of $22 billion and profit excluding some items of $1.70 a share. That compares with an average analyst estimate of $22.2 billion and profit of $1.75 a share, according to data compiled by Bloomberg.
EMC’s results in the quarter were also helped by corporate spending on VMware’s virtualization software to cut costs by putting multiple applications on a single server computer.
VMware, the biggest maker of software that lets computers run multiple operating systems, yesterday reported profit of 66 cents, excluding some items, exceeding the 60-cent average estimate. Sales rose to $1.06 billion from $843.7 million, topping the $1.03 billion average prediction.
VMWare’s shares rose 6.1 percent to $118.03. The stock advanced 34 percent this year before today.
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