On The Road To Recovery

Storage vendor EMC said services revenue increased 48 percent compared with the year-ago quarter, due in part to the impact of software company acquisitions and increased software maintenance revenue.

For the third quarter ended Sept. 30, EMC, Hopkinton, Mass., posted earnings of $218 million, or 9 cents per share, on a 34 percent increase in sales to $2.03 billion.

As for the overall IT spending climate, EMC CEO Joe Tucci said he sees "slow and steady" improvement in IT spending. He expects IT spending to be up 4 percent this year vs. 2003, with storage spending up approximately 7 percent, he said. Security vendor Symantec's fiscal second-quarter earnings also rose over the previous year as the company saw growth across all of its business segments.

For the quarter ending Oct. 1, the Cupertino, Calif.-based security vendor posted earnings of $135.6 million, or 38 cents per share, up from $84.3 million, or 24 cents per share, during the same quarter last year. Revenue was $618 million, 44 percent higher than fiscal second-quarter 2003 revenue of $429 million.

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A well-oiled reseller channel fueled record third-quarter earnings by security software vendor Trend Micro, said Lane Bess, president of the Tokyo-based company's North American operations.

For the quarter ended Sept. 30, Trend Micro posted a profit of $38 million, up from $21.2 million a year earlier. Third-quarter 2004 sales rose 36 percent year over year to $143 million, the company reported.

"This time last year, we had maybe 900 or 1,000 VARs. Today, we have just shy of 3,000 VARs that on a quarterly basis are moving our products," Bess said.

PC hardware sales also showed a rebound. IBM, Armonk, N.Y., reported third-quarter income of $1.8 billion, an increase of 1 percent from the $1.79 billion recorded a year earlier. Revenue totaled $23.4 billion, up 9 percent from the $21.5 billion reported in third-quarter 2003. Revenue from IBM's Personal Systems Group showed the biggest jump, up 17 percent to $3.3 billion, led by strong growth in ThinkPad sales.

Meanwhile, Vernon Hills, Ill.-based CDW's third- quarter sales totaled $1.51 billion, an increase of 24 percent vs. the prior-year quarter. Third-quarter net income was $65.2 million, an increase of 46 percent vs. the third quarter of 2003. CDW said its average daily sales during the quarter reached $23.6 million, a 24 percent jump over the year-earlier period.