With its many software acquisitions doing their part to pad the bottom line, EMC reported stunning fourth quarter revenue growth. EMC's results easily outpaced those of rival hardware companies.
EMC posted revenue of $2.4bn in the fourth quarter - a 27 per cent rise over the $1.9bn posted in the same period last year. The storage maker's net income surge was even more impressive, rising 46 per cent year-over-year to $321m. These totals give EMC six consecutive quarters of double-digit growth at a time when the storage businesses at IBM and HP have been unimpressive. EMC's results also surpass those of server makers - except for Dell - which have been lucky to post low, single-digit growth.
"For the second consecutive year we exceeded every major financial goal that we set in January," said EMC's CFO, Bill Teuber. "Cash and investments grew by more than $400m during the quarter, while we continued to leverage our financial strength by buying back $128m in company stock and acquiring Dantz Development Corporation."
EMC's recent software additions - Dantz, Documentum, Legato and VMware - drove much of the growth. They helped push up software license revenue by 43 per cent in the fourth quarter. Without these acquisitions, EMC's fourth quarter profit grew 19 per cent. (Doesn't have the same ring as 46 per cent growth, but is still impressive.)
For the full year, EMC reported $8.2bn in revenue, which marks a 32 per cent rise over the $6.2bn reported last year. Net income for 2004 jumped 76 per cent to $871m.
With all the software hoopla, it's easy to forget that EMC makes most of its money from good, old-fashioned boxes. Its systems group reported 15 per cent revenue growth in the fourth quarter on close to $1.1bn in sales. EMC's software group pulled in $637m in revenue, and its services group pulled in $611m. In the same period last year, EMC posted software revenue of $444m and services revenue of $438m.
In its first quarter of 2005, EMC expects to report revenue between $2.23bn and $2.25bn. ®