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EMC

EMC Corporation

6/20/2013, 2:32 AM ET

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Wednesday, June 19, 7:28 PM EMC is buying Israeli storage software startup ScaleIO for $200M-$300M, TechCrunch and Geektime report. ScaleIO's software allows storage found inside servers to be pooled and managed like storage arrays on a SAN. This can lead to both cost savings and (esp. when flash memory is used) performance gains. Acquiring ScaleIO would be the latest in a string of moves from EMC to lower its traditional focus on array sales. Last month, EMC announced ViPR, a software platform for managing storage hardware/services from both EMC and rivals, and in March, the company showed off new server flash cards and caching software. Comment! [Tech, M&A]
Thursday, June 13, 9:49 AM Pac Crest lifts EMC (EMC +0.9%) to Outperform and raises its PT to $30 just a day after Craig-Hallum upgraded shares to Buy. EMC has been treading water over the last two weeks after shooting higher on May 30 in response to its new dividend/buyback hikes. Comment! [Tech]
Wednesday, June 12, 9:12 AM EMC +1.3% following an upgrade to Buy from Craig-Hallum. The firm, which is raising its PT to $30 from $26, struck a less positive tone on EMC earlier this year. Comment! [Tech]
Tuesday, June 11, 2:26 PM NetApp (NTAP +0.3%) unveils Clustered Data ONTAP, a version of its proprietary storage OS that has been in development for years, and is aimed at the growing market for "scale-out" storage deployments (often used to support cloud services) in which resources from multiple systems are pooled and jointly managed. NetApp claims the OS supports 99.999% (five-nines) reliability, can scale to support an enormous 69PB storage spread out over 24 controller nodes, and can be closely integrated with VMware and Microsoft's virtualization software. It competes with EMC's thriving Isilon unit, which announced a big update for its OS last month. Comment! [Tech]
Monday, June 10, 7:16 PM Storage hardware sales are holding up only a little better than server sales: IDC estimates sales of standalone arrays fell 0.9% Y/Y in Q1, a reversal from growth of 2.3% and 4.7% in Q4 and 2012. Total storage sales (inc. server-attached gear) fell 3.2% after rising 0.7% in Q4. In the standalone market, IDC thinks #1 EMC had a 30.4% share (+140 bps Y/Y), #2 NetApp (NTAP) 14.9% (+80 bps), #3 IBM 10.9% (-50 bps thanks to a rough quarter), and #4 H-P (HPQ) 9.3% (-100 bps and also not faring well). Also: IDC thinks storage software sales rose 3.2% Y/Y in Q1. #1 EMC's share is pegged at 23.9%, #2 IBM's at 16.8%, and #3 Symantec's (SYMC) at 14.7%. CommVault (CVLT) and Veeam gained more share, growing 23% and 35% Y/Y. 5 Comments [Tech]
Friday, June 7, 5:25 PM EMC (EMC -0.1%) sold $5.5B worth of debt today to help finance its new dividend and aggressive buyback program. Much like the recent debt offerings of other tech blue-chips, the deal terms were favorable: EMC sold $2.5B worth of 5-year notes at a 1.875% yield, $2B of 7-year notes at 2.65%, and $1B of 10-year notes at 3.375%. Last week, the storage giant raised its buyback authorization by $5B to a remaining $5.5B, and promised to spend $3.5B of it by Q2 2014. 1 Comment [Tech]
Wednesday, June 5, 4:38 PM VMware (VMW, EMC) +1.6% AH after COO Carl Eschenback tries to use a BofA/Merrill conference talk to reassure investors on edge over EMC's cash flow guidance and downbeat sell-side commentary. Eschenbach has reiterated VMware's Q2/2013 guidance and operating cash flow targets (the latter might be below consensus), is optimistic about a 2H demand pickup, and claims the vCloud Suite is seeing good momentum. Shares fell 2.5% in regular trading following Deutsche's downgrade. 1 Comment [Tech, Breaking News, On the Move]
Monday, June 3, 4:20 PM Though VMware's (VMW -2.4%) management has declared the cash flow guidance recently provided by parent EMC inaccurate (due to differences in accounting), subsequent talks with management "imply that they are not entirely comfortable with Street numbers," says Nomura's Rick Sherlund, following up on his Friday note. Management's remarks suggest op. cash flow growth will match op. income growth - Sherlund had been forecasting the former would grow 15%, and believes the consensus for the latter was 24%. He doesn't know whether the shortfall is due to "high receivables or working capital," or demand issues, but thinks the lack of clarity makes for an "awkward situation." Investors don't seem thrilled either. Comment! [Tech, On the Move]
Friday, May 31, 12:51 PM VMware's (VMW +1.1%) guidance is unchanged, claims Nomura's Rick Sherlund after talking with management about yesterday's EMC cash flow forecasts, which included VMware forecasts that were well below consensus. Sherlund points out EMC and VMware recognize cash flow differently, and says channel checks point to a roughly in-line Q2. But he is concerned about a dearth of specialists and partners to push VMware's huge vCloud Suite (covers virtualization, data center management, and cloud management software), which underpins the company's efforts to grow in the face of slowing vSphere virtualization software demand. Comment! [Tech]
Thursday, May 30, 5:12 PM More on EMC/VMware: EMC (EMC +5.3%) is guiding for VMware (VMW -1.3%) to produce 2013 operating cash flow of $1.875B and free cash flow of $1.525B. That's well below Stifel's consensus figures of $2.37B and $2.01B. UBS' Brent Thill defends VMware, arguing EMC's forecast is conservative given it implies a 9% Y/Y drop in VMware's operating cash flow for the rest of 2013 (it grew 17% in Q1). Thill sees such a decline as unlikely in light of strong renewal trends for VMware's costly enterprise license agreements (ELAs). Comment! [Tech]
Thursday, May 30, 1:41 PM EMC (EMC +5.3%) and 80%-owned VMware (VMW -1.6%) head in opposite directions after the former issued fresh guidance to go with news it's raised its buyback authorization by $5B to a remaining $5.5B, initiated a dividend, and promised to spend $3B on buybacks between now and Q2 2014. Though EMC reiterated its 2013 free cash flow guidance of $5.5B, Stifel thinks the specifics suggest VMware's cash flow estimates are too high. EMC's outstanding authorization, which lasts until the end of 2015, is good for buying 10.5% of shares at current levels. Wells Fargo sees the buybacks lifting 2014 EPS by $0.11. Deutsche sees EMC's dividend rising over time. Comment! [Tech, On the Move]
Thursday, May 30, 9:13 AM Premarket gainers: NVE +22%. CLWR +20%. MY +15%. CLSN +13%. HSOL +12%. CPST +10%. EXPR +9%. LXRX +8%. BLDP +8%. VRNG +7%. RSOL +6%. WFR +6%. AMRN +6%. FSLR +6%. ALU +6%. EMC +6%. STP +5%. HIMX +5%. OCZ +5%.
Losers: ABIO -31%. BIG -9%. VNR -5%. BPFH -5%. 1 Comment [On the Move]
Thursday, May 30, 7:11 AM EMC increases the size of its buyback program to $6B (authorized over three years to December 2015) and says it plans to repurchase $3.5B worth of common stock by the end of FQ2 2014. The company also initiates a quarterly dividend of $0.10/share and says it plans to alter its capital structure to include more debt while still "maintaining a strong investment-grade profile." (PR) 1 Comment [Tech]
Tuesday, May 21, 7:07 PM VMware (VMW, EMC) officially launches its vCloud Hybrid Service, which allows clients to pair on-premise workloads with a VMware-run public cloud infrastructure. VMware claims the service supports more than 90 OS', has high-availability options, and allows public and on-premise workloads to be jointly managed. VMware also says it will offer SAP software, including Hana, "as a subscription service on premise and in the cloud." vCloud Hybrid competes with Amazon Web Services, Microsoft's Azure (perhaps the most direct rival), and Rackspace's OpenStack offerings. ITWorld calls it "ideal for a significant set of enterprise applications," but adds it's "no Amazon killer," given AWS' focus on low cost and ease-of-use. 3 Comments [Tech]
Monday, May 20, 12:49 PM Baird's Jayson Noland downgrades NetApp (NTAP -1.8%) to Underperform ahead of tomorrow's FQ4 report, citing share losses to EMC and others. Noland: "We are not advocating a short position ... due to the possibility of a positive investor reaction to opex rationalization or shareholder friendly use of cash ... We do recommend investors take profits." EMC has "outperformed NetApp" in Baird's reseller checks since Q3 '11, something Nolan attributes to the launch of EMC's VNX mid-range systems, more innovative products, and "increased channel friendliness." He also notes NetApp has been slow to roll out all-flash storage systems. Comment! [Tech, On the Move, Quick Ideas]
Thursday, May 16, 12:16 PM Cisco JV partner EMC (EMC +4.5%) joins the list of companies rallying in response to Cisco's FQ3 beat and guidance. Cisco mentioned on its earnings call integrated hardware solutions such as Vblock (offered by the Cisco/EMC VCE JV) are driving demand for its UCS servers - Cisco's UCS unit saw 77% Y/Y rev. growth. All in all, it's a good day for enterprise IT names, who are happy to receive some good earnings news after getting plenty of bad news (I, II, III, IV). HPQ +1.7%. IBM +1.3%. ORCL +1.3%. VMW +2.6%. TIBX +4.1%. CTXS +3.9%. CRM +3.8%. JIVE +4.1%. NTGR +2.7%. CVLT +2.6%. INFA +3%. (others rallying: I, II) 1 Comment [Tech, On the Move]

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