EMC Corporation (NYSE:EMC), the world leader in information storage, today reported sharply accelerated revenue growth and a 50% increase in net income for the second quarter of 2000
, for the first time exceeding the $2 billion mark in quarterly revenue.
Total storage revenue for the second quarter grew 43% compared with the second quarter of 1999 to $2.0 billion, marking EMC's highest rate of storage revenue growth in five years. This accelerated growth was highlighted by 96% year-to-year growth in enterprise storage software revenue, 36% year-to-year growth in enterprise storage systems revenue, and 30% year-to-year growth in midrange storage revenue.
Total consolidated results, which include both EMC's storage business and its Data General server division (formed after the acquisition of Data General Corp. during the fourth quarter of 1999), represented all-time record quarterly performance for EMC. Net income for the second quarter was $429 million, up 50% compared with the second quarter of 1999. On a diluted basis, earnings per share were $0.19 in the quarter, 46% higher than the second quarter of 1999 (adjusted for a 2-for-1 stock split effective June 2, 2000). Total consolidated revenue for the second quarter was $2.15 billion, 30% higher than the second quarter of 1999.
Mike Ruettgers, EMC's Chief Executive Officer, said, "This was our strongest quarter ever, marked by superior execution and the unmistakable message from our customers that EMC is delivering the world's best information infrastructure solutions to meet their escalating business requirements. In April we launched and delivered the most comprehensive set of new hardware and software products in EMC's history. The new Symmetrix 8000 family of enterprise storage systems roared into the market on a global scale with more than $500 million in revenue during its first quarter of general availability. This extraordinary level of demand during a major product transition had to be matched by nearly flawless execution, and the people of EMC rose to the challenge. We saw very strong results from our major international operations, with year-to-year storage revenue growth of 42% in EMEA (Europe, Middle East and Africa) and 111% in Asia Pacific. It's clear we gained market share again in the second quarter."
"Storage has become the hottest of all information technologies because it now determines an organization's ROI - return on information," Ruettgers continued. "Growth, profitability and differentiation are all predicated on how much and how well organizations use their information. And the place where information is put to work, where it grows and increases in value, is an EMC E-Infostructure. EMC is where information lives."
Among other major drivers of EMC's storage growth, software revenue surged 96% over last year's second quarter to $350 million. Revenue from EMC CLARiiON midrange storage systems rose 30% to $141 million, the best quarter in CLARiiON's history. Revenue from Symmetrix systems with Fibre Channel connectivity was $749 million in the second quarter, nearly double the level of a year ago. SAN (storage area network) revenue reached nearly $400 million in the second quarter, up 55% sequentially compared with the first quarter of 2000 and more than eightfold over the year-ago period, as customers around the world deployed the EMC Enterprise Storage Network (ESN). Revenue from networked-attached storage (NAS) - deployed with EMC Celerra, the world's premier enterprise-class NAS connectivity solution - increased more than seven-fold compared with the year-ago period, clearly establishing EMC as the fastest-growing participant in this relatively small but emerging market segment.
EMC's balance sheet also continued to strengthen, with cash and investments increasing to nearly $3.7 billion at the end of the quarter.
Other highlights of the quarter included the introduction of EMC CLARiiON FC4500 midrange storage systems, a new generation of EMC Celerra network-attached file servers, a new lineup of enhanced EMC Connectrix departmental switches and major enhancements to EMC's Connectrix enterprise director, the EMC Enginuity Operating Environment, and major enhancements to several EMC software products; the launch of the E-Infostructure Service Provider Program, a billion-dollar initiative that enables technology service providers (XSPs) to leverage EMC solutions; the expansion of E-Lab, the world's largest SAN interoperability testing center; the formation of an alliance with Lucent Technologies to integrate and qualify EMC storage as part of Lucent's CyberCarrier initiative for next-generation Internet services; the announcement and implementation of a 2-for-1 stock split, EMC's sixth split since 1992; and the launch of the company's new brand marketing, promotion and advertising campaign, including the new EMC tagline, "Where Information Lives."
EMC Corporation (NYSE:EMC) is the world leader in information storage systems, software, networks and services, providing the information infrastructure for a connected world. Information about EMC's products and services can be found at http://www.emc.com.