When most investors think of cloud computing and the mobile revolution, they think of smartphones and tablets. I tend to think of the data centers behind the scenes serving up the mobility, and the opportunities within.
All of those bytes flowing through data centers have to sit somewhere, and that's where EMC
Top-line revenue put up a solid 14% rise to $5.6 billion, and by the time you get to the bottom line you'll see that non-GAAP earnings per share jumped 17% to $0.49. On a GAAP basis, net income jumped 32% to $832 million in the quarter, which works out to $0.38 per share. Fourth-quarter revenue from majority-owned VMware
The company continues to put up strong international growth. While macroeconomic uncertainties certainly weighed on Europe, the Middle East, and Africa (EMEA), growing only 6%, the Asia Pacific and Japan and Latin America segments both grew 26%.
Closing out its fiscal 2011, sales totaled $20 billion for the year, a healthy 18% increase over the prior year. Full-year earnings per share rose 20% to $1.51.
EMC was able to pocket operating cash flow and free cash flow of $2.2 billion and $1.9 billion, respectively, in the fourth quarter, both putting up major growth. Operating cash flow jumped 44% while free cash flow soared 55%.
For 2012, sales are expected to be roughly $22 billion and non-GAAP earnings per share should be around $1.70.
EMC CEO Joe Tucci said: "EMC had a strong and record-breaking 2011. There's no doubt that cloud computing is completely transforming the IT industry and that Big Data promises to have a similarly profound effect on transforming the way we work and live."
CFO David Goulden said the company executed what he calls its "triple play": growing market share, reinvesting for future growth, and putting up stellar earnings in the process. He also said the company expects to outpace broader IT spending growth this year by over twofold.
Another encouraging trend is that EMC continues to focus heavily on its services offerings, which carry higher margins. Services revenue growth grew faster than product sales, rising 19% compared to 11%. Services now comprise more than 36% of total sales, a slight uptick from last year. They carry a 68% gross margin, higher than the 60% that products enjoy.
That shift in revenue composition has helped boost non-GAAP gross margins, which rose from 61.9% to 64.5%, while also helping to differentiate the company from rivals. Smaller rival NetApp
EMC's results, along with those from other tech names like IBM, which put up solid figures recently, are auspicious for companies that rely on heavy IT spending.
Along with NetApp, EMC will be facing a slew of competitors in the coming years, all of which are trying to focus on tapping into the enterprise's adoption of solid-state drives (SSD). OCZ Technology
There's also Fusion-io
EMC is leading the way in one of the most important aspects of one of the most important technological shifts of a generation. For now, its position is secure, so I'm giving it an "outperform" CAPScall, and don't be surprised if it finds its way into my personal portfolio one of these days.
EMC has been breaking a lot of its records lately, and that trend won't be ending anytime soon.
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Fool contributor Evan Niu owns shares of Apple, but he holds no other position in any company mentioned. Click here to see his holdings and a short bio. The Motley Fool owns shares of EMC, Apple, and International Business Machines. Motley Fool newsletter services have recommended buying shares of VMware and Apple. Motley Fool newsletter services have recommended creating a bull call spread position in Apple. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.