HOPKINTON, Mass. - October 16, 2003 - EMC Corporation (NYSE:EMC) today reported financial results for the third quarter of 2003, reflecting balanced double-digit growth across all major business segments and improved profitability.
Total consolidated revenue for the third quarter was $1.51 billion, 20% higher than the $1.26 billion reported for the third quarter of 2002. Net income for the third quarter was $159 million or $.07 per diluted share, including a $.02 benefit resulting from the favorable resolution of certain tax audits. This compares with net income of $21 million or $.01 per diluted share for the third quarter of 2002.
Joe Tucci, EMC's President and CEO, said, "We are pleased that our third-quarter results reflect strong customer acceptance of EMC's comprehensive lineup of automated networked storage solutions. We are on track to achieve double-digit growth for the year, which not many large technology companies will do in this challenging economic environment. With 11% revenue growth for the first nine months of 2003 compared with the same period in 2002, it is clear that we continue to gain market share and extend EMC's lead as the world's #1 provider of information storage solutions."
Tucci continued, "With Tuesday's announcement of our agreement to acquire Documentum and the pending completion of our acquisition of LEGATO, two complementary leaders in information management software, we are making the strategic moves necessary to enable our customers to manage all of their information according to its value to the business at every stage of its life, at the lowest total cost - creating the ultimate information lifecycle management company."
EMC's revenue growth was balanced across all major segments of its business. In particular, information storage software revenue grew to 23% of the company's total revenue, driven by demand for replication, multi-platform management and content-addressed storage (CAS) software.
Information storage systems revenue also had strong double-digit growth on a year-to-year basis, led by EMC's new Symmetrix DMX and CLARiiON CX networked information storage systems. Double-digit revenue growth in information storage services was spurred by strong customer demand for EMC's storage-focused professional services.
Bill Teuber, EMC's Executive Vice President and Chief Financial Officer, said, "The blend of new products and crisp execution across the entire organization enabled EMC to turn in strong top- and bottom-line results in what is traditionally the most challenging quarter of the year. We enhanced our balance sheet by growing cash and investments by almost $130 million to nearly $6.2 billion during the quarter, while buying back nearly $100 million worth of the company's stock."
EMC's rapid delivery of new products continued in the third quarter.
Highlights include the unveiling of the next major wave of Symmetrix DMX systems, software and related technologies, including the new Symmetrix DMX3000, an entry-level Symmetrix DMX800 configuration, new advanced replication technology, native iSCSI connectivity and enhanced functionality for mainframe customers; the extension of EMC CLARiiON's functional leadership through major enhancements to EMC Navisphere, EMC SnapView and EMC SAN Copy software; the strengthening of EMC's open software portfolio with the addition of powerful new VisualSRM and VisualSAN software for small-and medium-sized organizations; and the introduction of EMC OpenScale, the world's first automated "pay as you go"
billing for storage infrastructure.
EMC continued to extend its market reach in the third quarter by announcing its agreement to acquire LEGATO Systems, Inc., and create the world's most comprehensive portfolio of information storage software; partnering with BMC Software, the first independent software provider to resell EMC ControlCenter storage management software; and broadening its relationship with Oracle Corporation to include a new joint service available to help customers easily deploy Oracle® Database with EMC network attached storage
(NAS) technology.
Business Outlook
The following statements are based on current expectations. These statements assume the acquisition of LEGATO Systems, Inc., closes on or about October 20, 2003, and the acquisition of Documentum, Inc., closes at the beginning of January 2004. These statements are forward-looking, and actual results may differ materially. These statements do not include the potential impact of any mergers, acquisitions, divestitures or business combinations that may be completed after the date hereof, except for the planned acquisitions of LEGATO Systems, Inc., and Documentum, Inc.
- Revenue in the fourth quarter of 2003 is expected to be between $1.74 billion and $1.78 billion;
- Earnings per share for the fourth quarter of 2003 are expected to be $.05 per diluted share including in-process R&D charges and other integration costs associated with the acquisition of LEGATO. These charges are expected to be $.02 per diluted share;
- EMC expects software license revenues to represent 26% of total revenues for 2004 and 27% of total revenues exiting the fourth quarter of 2004;
- EMC expects the acquisition of Documentum to dilute first quarter 2004 diluted earnings per share by $.02 per share, not to have any material impact to diluted earnings per share for the remainder of 2004 and to be slightly accretive to diluted earnings per share in 2005.
About EMC
EMC Corporation (NYSE: EMC) is the world leader in information storage systems, software, networks and services, providing automated networked storage solutions to help organizations get the maximum value from their information, at the lowest total cost, across every point in the information lifecycle. Information about EMC's products and services can be found at www.EMC.com.
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For further information:
EMC
Kathleen De Bondt, marketing manager Benelux T. + 31 (0) 30. 630.50.00 E. debondt_kathleen@emc.com
Bennis Porter Novelli
Remco Plettenberg
T. + 31 (0)20. 543.76.00
E. rplettenberg@bennispn.nl