Strong fourth-quarter 2009 revenue and earnings and a higher-than-expected outlook for 2010 combined to give storage leader EMC momentum as the economy -- and IT spending -- start inching back to normalcy.
EMC said Tuesday it is looking for solid growth in its core businesses; new opportunities in fast-growth markets including storage, virtualization and cloud computing; and an ever-larger technology and channel partner ecosystem to drive continued success in 2010.
EMC on Tuesday said that revenue in its fourth quarter of 2009, which ended Dec. 31, reached $4.1 billion, up 2 percent from the $4 billion reported in the fourth quarter of 2008 and $100 million more than EMC's previous guidance.
The company reported income for the fourth quarter of 2009 of $426.5 million, or 20 cents per share, up significantly from the $270 million, or 13 cents per share, reported for the same period in 2008.
For the fourth quarter of 2009, storage product and services revenue fell slightly compared to the same quarter of 2008, as did revenue from content management and archiving, and from information infrastructure.
However, revenue from EMC's security business and from its majority ownership of VMware both showed strong growth. VMware on Monday reported record fourth-quarter revenue but falling profits compared to the prior year.
The strong fourth quarter was not enough to pull EMC's full-year revenue and income over that of 2008. For the year, EMC reported revenue of $14 billion, down about 6 percent from the $14.9 billion it reported in 2008. The company also reported income of $1.1 billion, or 55 cents per share, for all of 2009, down from the $1.3 billion, or 61 cents per share, it reported in the previous year.
The economic environment in 2009 was pretty much as EMC expected it to be, with reasonable stability characterizing the fourth quarter, said David Goulden, executive vice president and CFO of EMC.
However, Goulden said, some of the uncertainty reflected in 2009 is wearing off. "While there's still uncertainty as customers evaluate their own budgets and plans, we do expect 2010 to be better than 2009," he said.
Goulden said EMC expects overall IT spending to grow between 3 percent and 5 percent in 2010 over 2009, and said that will result in an increase of EMC's total addressable market of between 6 percent and 8 percent.
"Given EMC's focus on the cloud, and our leadership position in the most important opportunities such as storage tiering, virtualization, security, next generation backup, etc., we believe that EMC is poised to grow even faster and gain share," he said.
As a result of those factors, EMC expects 2010 full-year revenue to hit $16 billion, up 14 percent over 2009's revenue, Goulden said. He also expects non-GAAP margins of 20 percent, and non-GAAP earnings per share of $1.12, the latter of which is up 24 percent over that of 2009.
"(That) will certainly result in significant share gain across our businesses," he said.
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