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Drop in gov’t spending hurts EMC 3Q profit

October 22, 2013

NEWS: EMC said Tuesday that its third-quarter net income fell 6 percent as federal government spending declined, and the data storage equipment maker cut its outlook for the year.

DETAILS: The Hopkinton, Mass.-based company said the July-September quarter’s results were hurt by lower government spending, but overall storage demand picked up during the quarter.

NUMBERS: EMC earned $586 million, or 27 cents per share, down from $626 million, or 28 cents per share, in the same quarter of 2012. Excluding one-time items, the company said it posted an adjusted profit of 40 cents per share. Revenue rose 5 percent, to $5.54 billion from $5.28 billion.

Analysts, on average, expected a profit of 45 cents per share on $5.8 billion in revenue, according to FactSet.

FUTURE: EMC said Tuesday that it expects to post an adjusted 2013 profit of $1.80 per share on $23.25 billion in revenue. In July it predicted profit of $1.85 per share on revenue of $23.5 billion. Analysts forecast a profit of $1.86 per share on $23.45 billion in revenue.

STOCK: EMC shares fell $1.07, or 4.3 percent, to $24.17 in morning trading. The stock had been almost unchanged this year.

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