EMC earnings fall 43 per cent, but says worst is past

Completes acquisition of Data Domain

EMC's second-quarter net income fell 43 per cent year on year, and revenue fell 11 per cent, as customers cut back spending on IT projects, it said Thursday.

However, that spending is no longer in decline but stabilizing, EMC said, pointing to a 3 per cent increase in revenue compared to the previous quarter, and a 6 per cent rise in net income. It expects revenue to continue increasing at the same rate through the third quarter.

Including revenue from its acquisition of data deduplication vendor Data Domain, EMC expects third-quarter revenue will pick up even faster, between 4 per cent and 5 per cent up on the second quarter.

That acquisition is now completed, EMC announced Thursday, with the holders of around 90.3 per cent of the outstanding Data Domain shares having accepted its US$33.50-per-share offer. With the shares EMC already held, that gives it control of 94.2 per cent of outstanding Data Domain shares.

EMC reported net income of $US205.2 million on revenue of $3.26 billion for the quarter ended June 30, down from $360.1 million and $3.67 billion respectively for the year-earlier quarter.

Revenue from the company's information infrastructure business -- information storage, content management, archiving and RSA Security -- totalled $US2.8 billion, up 5 per cent quarter on quarter. VMware, the virtualization specialist majority-owned by EMC, contributed revenue of $455 million.

Despite its optimism about growth in the coming quarters, EMC expects revenue for the full year to decline to $US13.8 billion, including $200 million from Data Domain, with earnings per share of $0.51. For 2008, the company reported revenue of $14.9 billion and earnings of $1.35 billion, or $0.64 per share.

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