EMC, the world's largest maker of data-storage systems, Thursday reported its second consecutive quarterly net loss on sales that were cut 42 percent amid a pricing war with International Business Machines
The loss was smaller than Wall Street estimates, sending EMC shares up nearly 10 percent in pre-open trading to $16 from a Wednesday close of $14.56 on the New York Stock Exchange.
EMC said it posted a net loss of $70 million, or 3 cents a diluted share, for the fourth quarter that ended Dec. 31, compared with net income of $562.8 million, or 25 cents a diluted share, in the year-ago quarter.
Analysts were looking for EMC to lose 4 cents to 10 cents a share, with a consensus loss estimate of 7 cents a share, according to Thomson Financial/First Call.
EMC Chief Executive Joe Tucci said the firm finished 2001 with momentum after a dismal third quarter when the company posted its first net loss in a dozen years. But some analysts worried that EMC had to cut prices sharply in the fourth quarter to remain competitive.
The company's gross margin, as a percentage of revenue was 36.9 percent in the fourth quarter, compared with 59.2 percent in the year-ago period.
EMC's key storage systems revenue tumbled to $842 million, down from $1.8 billion in the year-ago quarter. Software sales, which many see as EMC's future, dropped to $352 million from a year-ago level of $483 million.
EMC's total consolidated revenue tumbled to $1.51 billion, down from $2.62 billion in the year-ago period.
But that was better than the revenue expectations of many analysts, said Gary Helmig, an analyst at SoundView Technology
"I think people would have been disappointed if they would have come in with less than ($1.4 billion) in revenue," Helmig said.
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