Press Release

EMC Reports Second Quarter Results

Revenue Up 7% Year Over Year, Earnings Per Share Exceeded Target

Hopkinton, Mass., Wednesday, July 16, 2003 - 

 

EMC Corporation (NYSE:EMC) today reported financial results for the second quarter of 2003, reflecting strong customer adoption of EMC's information storage solutions in a challenging IT spending environment.

 

Total consolidated revenue for the second quarter was $1.48 billion, 7% higher than the $1.39 billion reported for the second quarter of 2002. Net income for the second quarter was $82 million or $.04 per diluted share, compared with net income of $1 million or $.00 per diluted share for the second quarter of 2002.

 

Joe Tucci, EMC's President and CEO, said, "The two words that best describe EMC's second-quarter performance are solid and balanced. Our automated networked storage strategy and strong execution are producing good results across all major segments of our business. We are experiencing the benefits of a completely refreshed product portfolio, broadened services offerings and an expanded distribution network. All signs point to additional EMC market share gains during the second quarter and we expect that to continue through the remainder of 2003."

 

EMC's second-quarter results were marked by sequential growth across all major segments of the business. Total information storage systems revenue, including EMC's new Symmetrix DMX, CLARiiON CX and Centera networked information storage systems, grew 7% sequentially compared with the first quarter of 2003. Revenue from the new, highly acclaimed Symmetrix DMX series of high-end networked storage systems accelerated sharply and accounted for approximately 80% of total Symmetrix systems sales in the second quarter. Revenue from EMC's industry-leading CLARiiON CX series again grew sequentially.

 

Enthusiastic customer adoption of ATA technology, available on both CLARiiON and Centera systems, resulted in nearly 4.5 petabytes of ATA-based EMC storage shipped during the second quarter.

 

Total information storage software revenue grew 8% sequentially compared with the first quarter of 2003. Revenue from EMC's open multi-platform software, which includes products developed under the AutoIS open software strategy, grew 11% sequentially compared with the first quarter of 2003, driven by demand for the EMC ControlCenter family of storage management software. Total information storage services revenue grew 7% sequentially, led by an increase in software maintenance and support and continued demand for EMC's storage-focused professional services.

 

Bill Teuber, EMC's Executive Vice President and Chief Financial Officer, said, "Our newly introduced products, broadened distribution channels, storage services offerings, and a much leaner cost structure have all contributed to a significant improvement in our profitability over the last 12 months. With cash and investments growing by $385 million during the quarter, reaching approximately $6.1 billion and virtually no debt, we have significant resources for the future."

 

In addition to broad customer acceptance of EMC's recently introduced products, highlights of the second quarter included a groundbreaking new version of EMC's popular PowerPath software, including the addition of integrated volume management, multi-vendor array support, and application availability features such as non-disruptive upgrades; the introduction of EMC Centera Compliance Edition, a specialized content addressed storage solution specifically designed to meet and exceed today's strictest records retention regulations; additions to the EMC ControlCenter family of storage management software including new online access and subscription-based software, SAN Architect and AutoAdvice; the announcement of the EMC NetWin 200, the first in a new family of Windows® Storage Server products; new and/or enhanced alliances with Cisco, Dell, Fujitsu Siemens, Microsoft, and MTI; a new multi-tiered channel partner program to strengthen EMC's ties with the world's leading storage resellers; and the acquisition of Astrum Software Corporation, a privately held supplier of storage resource management (SRM) software for multi-platform, mid-tier storage environments.

 

Also during the quarter, EMC Automated Networked Storage continued to be recognized for innovation and market leadership. The new CLARiiON CX series of networked storage systems received the MVP (Most Valuable Product) award at the 2003 Storage World Conference. New Gartner findings also confirmed that EMC was the world's #1 storage systems and storage management software provider in 2002.*

 

Business Outlook

 

The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. Except for the planned acquisition of LEGATO Systems, Inc., these statements do not include the potential impact of any mergers, acquisitions, divestitures or business combinations that may be completed after the date hereof. These statements supersede the Business Outlook set forth in EMC's news release dated April 16, 2003, reporting financial results for the first quarter of 2003.

  • Revenue in the third quarter of 2003 is expected to be between $1.45 billion and $1.50 billion.
  • EMC expects gross and operating margins for the third quarter of 2003 to be relatively similar to those of the second quarter of 2003.
  • Earnings per share for the third quarter of 2003 are expected to be $.04 per diluted share.
  • EMC expects to report net income for each remaining quarter in 2003.
  • EMC expects the acquisition of LEGATO to be slightly accretive to 2004 diluted earnings per share.

 

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.

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