EMC reports record profit and revenue in Q4, driven by VMware and sales in Asia

Revenue grew 8 percent, and net income 5 percent, driven by a 22 percent increase in revenue at VMware

EMC saw fourth-quarter revenue rise 8 percent, driven mainly by strong performance at its VMware subsidiary, while net income rose 5 percent, both record figures for the company.

Revenue totaled US$6 billion for the fourth quarter, up 8 percent year-on-year, the company reported Tuesday, while net income hit $870 million, up 5 percent.

EMC expects earnings to grow faster than revenue this year, EMC President and COO David Goulden said in a conference call with analysts. Revenue for the full year 2012 totaled $21.7 billion, and should reach $23.5 billion this year, growing faster in the second half than the first, he said.

"Our strategy continues to be focused on cloud, big data and trusted IT," he said.

Much of the growth in EMC's fourth-quarter revenue came from virtualization subsidiary VMware, where revenue totaled $1.29 billion, up 22 percent year on year. Growth at that division is slowing, though, prompting VMware to announce 900 job cuts while reporting its results earlier Tuesday.

Fourth-quarter revenue from EMC's high-end and midtier networked storage platforms rose 6 percent year-on-year, as did revenue from its Symmetrix storage products.

Growth in midtier storage product sales, including the Isilon NAS range, slowed to 5 percent in the fourth quarter, down from 9 percent for the full year, Goulden said.

The company also said demand for flash-based caching and storage remained strong.

"Over half of our storage arrays go out with some amount of flash. Customers are taking advantage of that in a hybrid array," he said.

The importance of flash is not necessarily best measured by the share of storage that it represents: For some customers, flash might represent just 5 percent of storage but account for 80 percent of input-output operations per second, Goulden said.

Chairman and CEO Joe Tucci added that some products would have more flash storage, however. "You will see multiple announcements where we're playing on the all-flash storage side and multiple products playing in hybrid," he said.

EMC's security division, RSA, saw overall revenue decline 3 percent to $235 million, with a marked shift from products to services.

Around the world, revenue from the U.S. grew 5 percent to $3.1 billion. It now accounts for 52 percent of EMC's revenue. Outside the U.S., revenue grew at 12 percent, with the fastest growth, at 19 percent, in Asia Pacific and Japan.

Peter Sayer covers open source software, European intellectual property legislation and general technology breaking news for IDG News Service. Send comments and news tips to Peter at peter_sayer@idg.com.

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Peter Sayer

IDG News Service
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