EMC was bullish about revenue growth in the year ahead after storming past Wall Street's expectations in its fourth fiscal quarter, and said it expects to be a $12 billion company by 2001.
But this did not appear to be enough to satisfy the markets, which sent the storage supplier's stock tumbling by $9 to close at $111.
For its fourth fiscal quarter, EMC saw revenue increase by 21 per cent to $1.88 billion. Profits rose 38 per cent to $377 million or $0.34 per share, not including after tax charges of $170 million or $0.15 per share related to the acquisition of Data General in October last year. This compared with income of $273 million or $0.25 per share in the year ago quarter.
The First Call analysts' consensus estimate had expected earnings of $0.31 per share.
Mike Ruettgers, EMC's chief executive, said: "I've never been more excited to be in the storage business," adding that the firm expected revenue growth to be in excess of 25 per cent in the year ahead. EMC generated 1999 sales of $6.72 billion, up 24 per cent on the previous year, while profit rose 50 per cent for the full fiscal year to $1.18 billion or $1.07 per share.
Ruettgers added that, not counting the purchase of Data General, the company had added 3000 jobs in 1999 and plans to hire 4000 new employees in the coming year.
He attributed growth to strong software sales and continued success in selling to the storage area network (SAN) and network attached storage (NAS) markets, and added that the Year 2000 problem had proved a non event for the firm. "No impact for us," he said. Mark Kelleher, an analyst at SunTrust Equitable Securities said: "The numbers beat expectations. The pipeline is strong."
Storage revenues for the fourth quarter rose 27 per cent to $1.66 billion, while software sales, which represented 17 per cent of EMC's total storage revenue, increased by 71 per cent to $281 million.
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