EMC Corporation (NYSE:EMC) today reported financial results for the first quarter of 2003. The results reflect strong customer adoption of EMC's broad portfolio of automated networked storage solutions.

Total consolidated revenue for the first quarter was $1.38 billion, 6% higher than the $1.30 billion reported in the first quarter of 2002. Net income for the first quarter was $35 million or $.02 per diluted share, compared with a net loss of $77 million or $.03 per diluted share in the first quarter of 2002.

Joe Tucci, EMC's President and CEO, said, "The product innovation engine at EMC is running in overdrive. We continue to earn the confidence of new and existing customers by delivering market-leading price/performance through the broadest portfolio of storage platforms, software and services in EMC's history. As a result, I believe we again gained market share during the first quarter."

EMC's first-quarter results were marked by encouraging performance in several strategic areas. Revenue from EMC's new Symmetrix DMX series of high-end networked storage systems, introduced on February 3, 2003, accounted for more than half of total Symmetrix systems sales. Revenue from EMC's CLARiiON CX series of networked storage systems and software, introduced in the third quarter of 2002, continued to achieve strong growth. Revenue from information storage software grew 6% in the first quarter compared with the first quarter of 2002. Revenue from information storage services grew 28% in the first quarter compared with the first quarter of 2002. EMC Centera Content Addressed Storage (CAS) systems, introduced a year ago, continue to be EMC's fastest-growing major product line. EMC shipped more than two petabytes (2,000 terabytes) of Centera systems in the first quarter.

Bill Teuber, EMC's Executive Vice President and Chief Financial Officer, said, "We achieved significant improvement in our profitability due to the popularity of our new line of storage platforms, including the Symmetrix DMX and CLARiiON CX series, growth in storage services revenue, and a lowered cost structure. Over the past seven quarters, we have reduced our revenue break-even point by more than $2 billion on an annualized basis. During the first quarter, our continued attack on costs and improved margins enabled us to reach our targeted break-even level a full quarter ahead of schedule. With cash and investments at approximately $5.7 billion and virtually no debt, we have a solid financial foundation."

For details on some of the many customers who chose to implement EMC Automated Networked Storage solutions during the first quarter, please see EMC's separate customer news release issued today.

Besides the introduction of Symmetrix DMX and its record-breaking new Direct Matrix Architecture, other highlights of the first quarter included the introduction of the Symmetrix z8000 and CLARiiON with ATA networked storage systems; the introduction of EMC SAN Copy, enabling customers to centrally manage the movement and replication of data between current and legacy EMC CLARiiON and Symmetrix systems; and the broadening of EMC's market reach through new and enhanced partner and channel relationships with Oracle, Lockheed Martin, GE Medical, Eastman Kodak, Iron Mountain and KVS Inc. Also during the quarter, EMC settled all pending patent infringement litigation with Hitachi and Hitachi Data Systems (HDS) and agreed to exchange application programming interfaces (APIs) with Hitachi, HDS and Veritas Software.

EMC Automated Networked Storage solutions have been recognized repeatedly since the start of the year for innovation and market leadership. EMC was the only company to achieve "leader" status in both the SAN and NAS markets in META Group's recently released METAspectrum^SM. New market data released by IDC found that EMC gained market share in the fourth quarter of 2002 to finish the year as the revenue leader in both the networked storage (Open SAN + NAS) and External RAID systems markets. Analysts at Gartner Dataquest confirmed that EMC was the world's leading supplier of storage management software in 2002, for the fourth straight year.

Business Outlook

The following statements are based on current expectations. 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.

• Revenue in the second quarter of 2003 is expected to be between $1.425 billion and $1.475 billion.
• EMC expects gross margins to be relatively flat in the second quarter of 2003 compared with the first quarter of 2003.
• Earnings per share for the second quarter of 2003 are expected to be $.03 per diluted share.
• EMC expects to report net income for each quarter in 2003.
• EMC expects continued improvement in operating margins during 2003 compared with 2002.
• The tax rate for the remainder of 2003 is expected to be approximately 32%.

About EMC

EMC Corporation is the world leader in information storage systems, software, networks and services, providing automated networked storage solutions that enable organizations of all sizes to better and more cost-effectively manage, protect and share their information. More information about EMC's products and services can be found at www.EMC.com.