HOPKINTON (dpa-AFX) - (Correction: The original article incorrectly stated that the company lowered its full-year guidance. A corrected version follows.)
Data storage solutions provider EMC Corp. (EMC) on Wednesday reported a 32 percent decline in its first quarter profits compared to last year, as higher costs more than offset an increase in revenues. However, adjusted earnings per share matched analysts' estimates, while revenues beat expectations.
Looking ahead, EMC reaffirmed its full-year earnings outlook. In addition, the company's board raised the quarterly dividend by 15 percent.
David Goulden, CEO of EMC Information Infrastructure and EMC's Chief Financial Officer, said, 'While planned business practice changes had a negative impact on year-over-year revenue and EPS growth in the quarter, we are very confident we are on the right track with our Federation model and technologies.'
Net income attributable to the Hopkinton, Massachusetts-based company for the first quarter was $392 million or $0.19 per share, down from $580 million or $0.26 per share in the year-ago period.
Adjusted net income for the quarter was $728 million or $0.35 per share, compared to $850 million or $0.39 per share in the same period last year.
On average, analysts polled by Thomson Reuters expected the company to report earnings of $0.35 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter rose 2 percent to $5.48 billion from $5.39 billion in the prior-year quarter. Analysts had a consensus revenue estimate of $5.43 billion for the quarter.
Revenue from the U.S. remained flat year over year at $2.8 billion, and represented 52 percent of consolidated first-quarter revenue.
Revenue from EMC's business operations outside of the U.S. increased 3 percent from the year-ago period to $2.6 billion, and accounted for 48 percent of consolidated revenue. Within this, revenue from EMC's Europe, Middle East and Africa region grew 8 percent from last year.
Revenue from the EMC Information Infrastructure business for the quarter declined 3 percent from last year. However, Emerging Storage business revenue surged 81 percent from the year-ago quarter, while Pivotal revenue grew 41 percent. EMC's subsidiary VMware Inc. (VMW) recorded a 16 percent year-over-year increase in revenue for the quarter.
EMC's total costs and expenses for the quarter rose 4 percent from the year-ago period to $4.83 billion and includes an 8 percent increase in selling, general and administrative expenses. Income tax provision for the quarter was $139 million, compared to $76 million in the same period last year.
EMC's board of directors approved a 15 percent increase in the quarterly cash dividend paid to shareholders. The first increased dividend of $0.115 per share of common stock will be paid on July 23, 2014 to shareholders of record as of the close of business on July 1, 2014.
For fiscal 2014, the company said it continues to expect non-GAAP earnings of $1.90 per share on revenues of $24.58 billion.
Wall Street is currently looking for fiscal year 2014 earnings of $1.94 per share on annual revenues of $24.51 billion.
EMC also said it expects to repurchase an aggregate of $2 billion of its common stock in 2014.
EMC is currently trading at $25.94, down $0.82 or 3.05 percent on a volume of 17.22 million shares.
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