EMC Continues Its String of Growth

Watch stocks you care about

The single, easiest way to keep track of all the stocks that matter...

Your own personalized stock watchlist!

It's a 100% FREE Motley Fool service...

Click Here Now

Just because there's little mention of record-breaking performance, that doesn't make EMC's (NYSE: EMC  ) first-quarter earnings any less impressive. The past two quarters have been record-breakers, but the storage specialist still delivered this time around.

As expected, EMC was able to put up its ninth consecutive quarter of double-digit growth in sales and profit growth. Revenue jumped 11% to $5.1 billion, while non-GAAP earnings per share rose by 19% to $0.37. Analysts were expecting slightly more in revenue, although the bottom line registered a small beat.

Non-GAAP gross margin also meaningfully expanded from a year ago, from 60.1% to 63%, while operating margin also put up a healthy gain.

EMC continues to execute on the "triple play," a theme it's been reiterating for quite some time: gaining market share, reinvesting for growth, and boosting earnings in the process. The company thinks it has a good chance of exceeding its full-year financial targets.

Most of EMC's sales continue to be generated domestically, with 52% coming from stateside. The Asia-Pacific and Japan region showed particular strength, increasing 20% to an all-time record high, while Latin America also put up a strong showing with a 20% jump.

Its majority ownership in virtualization specialist VMWare (NYSE: VMW  ) continues to generate dividends, with revenue from VMWare growing 25%.

Full-year revenue guidance expects the top line to be at least $22 billion this year, with adjusted earnings per share expected to top $1.70. Those predictions are shy of the $22.2 billion in revenue and the $1.75-per-share profit the Street was looking for, which is probably the cause of the selling pressure today. EMC is also planning on repurchasing $700 million of stock throughout the year.

Investors might have been expecting a rosier forecast, especially as rival IBM (NYSE: IBM  ) raised its own guidance when it reported earlier this week, largely thanks to robust software demand.

It was still a very respectable quarter, and EMC remains poised to capitalize on growing demand for storage driven by the cloud.

EMC is banking on Big Data, but there's another company that's also profiting on the booming new revolution in data mining and business intelligence. Get the free report to find out what company it is.

Fool contributor Evan Niu holds no position in any company mentioned. Check out his holdings and a short bio The Motley Fool owns shares of IBM and EMC. Motley Fool newsletter services have recommended buying shares of VMware. The Motley Fool has a disclosure policy. We Fools don't all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. Try any of our Foolish newsletter services free for 30 days.

Read/Post Comments (0) | Recommend This Article (2)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Compare Brokers

Fool Disclosure

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 1866302, ~/Articles/ArticleHandler.aspx, 10/26/2016 9:17:05 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...

Today's Market

updated 1 minute ago Sponsored by:
DOW 18,199.33 30.06 0.17%
S&P 500 2,139.43 -3.73 -0.17%
NASD 5,250.27 -33.13 -0.63%

Create My Watchlist

Go to My Watchlist

You don't seem to be following any stocks yet!

Better investing starts with a watchlist. Now you can create a personalized watchlist and get immediate access to the personalized information you need to make successful investing decisions.

Data delayed up to 5 minutes

Related Tickers

9/7/2016 4:05 PM
EMC $0.00 Down +0.00 +0.00%
EMC CAPS Rating: ****
IBM $151.81 Up +0.93 +0.62%
IBM CAPS Rating: ****
VMW $73.31 Up +0.11 +0.15%
VMware CAPS Rating: ***