EMC Reports Strong Data Storage, Deduplication Sales

Tuesday Jan 26th 2010 by Paul Shread
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EMC returned to growth in the fourth quarter, thanks to storage hardware, deduplication and virtualization.

EMC (NYSE: EMC) returned to growth in the fourth quarter of 2009 for the first time in a year, thanks to double-digit sales growth in its data storage systems and greater than 50 percent growth in data deduplication.

EMC released its quarterly results today. Sales were up 2 percent year-over-year to $4.1 billion, topping the $4.03 billion Thomson Reuters consensus forecast. Non-GAAP earnings were $695.5 million, or 33 cents a share, also better than expected.

EMC ended the quarter with $9.4 billion in cash and investments.

The data storage giant said it expects 2010 sales of $16 billion, up 14 percent from 2009 and well above $15.45 billion estimates, and earnings of $1.12 a share, also ahead of analysts' forecasts.

On a conference call with analysts, CFO David Goulden said the strong results were driven by double-digit growth across its Clariion, Celerra and Symmetrix storage arrays, and greater than 50 percent growth in its Data Domain and Avamar dedupe products. Solid demand for its new Symmetrix V-Max systems and fully automated storage tiering (FAST) technology also helped boost sales.

Goulden also revealed that the company won a 1.4 petabyte deal at "a major New York-based stock exchange" over rival NetApp (NASDAQ: NTAP).

CEO Joe Tucci said he expects 3 to 5 percent growth in IT spending this year, 6 to 7 percent growth in storage, and 15 to 20 percent in virtualization spending — a prediction underscored by the blow-out results reported by virtualization leader VMware (NYSE: VMW) last night, which is majority owned by EMC.

EMC also reported strong demand for its RSA security solutions, Iomega products and its consulting and professional services.

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