Seeking Alpha

EMC issues light Q1/2014 guidance, shares tick lower

  • Though it beat Q4 estimates, EMC (EMC -1%) is guiding for 2014 revenue of $24.5B and EPS of $1.95, below a consensus of $24.96B and $2.04. EMC is also guiding for Q1 revenue of ~$5.39B and EPS of $0.35, below a consensus of $5.81B and $0.43.
  • Q4 results were solid. Total product revenue, including that of subsidiary VMware, rose 11% Y/Y in Q4 to $4.16B. Services revenue rose 10% to $2.53B.
  • In addition, EMC's core Information Storage unit (71% of revenue) saw its sales rise 10% Y/Y after growing just 1% in Q3 (hurt by federal weakness). Emerging Storage products (includes Isilon scale-out NAS systems, Atmos cloud storage, and XtremIO's flash storage) grew 73% to $560M. Unified and backup/recovery storage sales (includes mid-range hardware) rose 11% to $1.87B after growing just 3% in Q3, and high-end storage rose 1% to $1.28B after declining 8% in Q3.
  • EMC and VMware's (VMW -1.1%) Pivotal unit, which is set to go public, saw its sales drop 6% Y/Y to $91M. EMC's RSA unit saw sales rise 17% to $275M in spite of a recent NSA-related controversy.
  • Gross margin fell 160 bps Y/Y in Q4 to 64.6%. EMC spent $3.01B on buybacks in 2013, and expects to spend $2B in 2014. 2013 free cash flow totaled $5.5B, above net income of $3.9B.
  • Yesterday: VMware offers soft margin guidance with Q4 results.
  • PR, financials, slides

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Comments (2)
  • WaveRider007
    , contributor
    Comments (645) | Send Message
     
    The juggernaut needs to slow down a bit, grow, amd then we continue onward. Data storage, archiving, search, and retrieval is growing exponentially and EMC is there to help. NTAP is a strong competitor, but EMC is much better diversified in both hardware and software. Over the long term, EMC is the one. Dont forget stock buybacks for all the stock owners. Sounds like a plan to me.
    29 Jan 2014, 10:31 AM Reply Like
  • WaveRider007
    , contributor
    Comments (645) | Send Message
     
    The juggernaut needs to slow down a bit, grow, amd then we continue onward. Data storage, archiving, search, and retrieval is growing exponentially and EMC is there to help. NTAP is a strong competitor, but EMC is much better diversified in both hardware and software. Over the long term, EMC is the one. Dont forget stock buybacks for all the stock owners. Sounds like a plan to me.
    29 Jan 2014, 10:31 AM Reply Like
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