Thursday October 22, 01:36 PM
UPDATE 2-EMC posts profit ahead of Wall Street view
By Jim Finkle
ORLANDO, Fla., Oct 22 (Reuters) - EMC Corp (NYSE: EMC - news) , the top maker of corporate data storage equipment, reported a better-than-expected quarterly profit as it slashed costs and said corporate technology spending is rebounding.
The company also issued a quarterly forecast ahead of analysts' expectations due to cost cuts. The company expects to save at least $450 million this year and $500 million next year from a previously announced cost-cutting plan. At the same time the economy is starting to improve.
'Customers are signaling more comfort spending their IT budgets, which gives EMC confidence in our ability to perform well,' Chief Executive Joe Tucci said in a statement.
The company posted profit excluding items of 23 cents per share in the third quarter that ended Sept. 30, beating analysts' average forecast of 21 cents, according to Thomson Reuters I/B/E/S.
Revenue at the company -- whose rivals include IBM (NYSE: IBM - news) , Hewlett-Packard Co and NetApp Inc -- fell 5 percent to $3.52 billion, beating the $3.45 billion average forecast of analysts.
EMC projected fourth-quarter profit of 30 cents per share excluding items, beating the average forecast of 29 cents. It also forecast quarterly revenue of $4 billion, ahead of the $3.97 billion Wall Street estimate.
The company has cut spending over the past year as the recession has hurt demand for its storage equipment, software and security products. EMC's third-quarter gross margin, excluding items, widened to 57.3 percent from 55.2 percent in the second quarter.
Third-quarter net income fell to $298 million, or 14 cents per share, from $393 million, or 19 cents, a year earlier.
The company's results were helped by a stronger-than-expected earnings report from its VMware Inc business software subsidiary, which released results late on Wednesday.
EMC shares rose 1.7 percent to $17.80 in pre-market trade.
(Reporting by Jim Finkle in Orlando, editing by Maureen Bavdek and Derek Caney) Keywords: EMC/
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