EMC Earnings Preview: Another Record Quarter?

Storage heavyweight EMC (NYS: EMC) has been full of record-breaking quarters lately. Both the third- and fourth-quarter earnings reports were all-time records, to name a couple. EMC is scheduled to report first-quarter results tomorrow.

Can the storage leader keep up its streak? When it comes to the Street's consensus estimates, the company looks like it has a pretty good shot. For the first quarter, analysts are looking for revenue of $5.1 billion, which is expected to give way to $0.36 in earnings per share. Those forecasts represent year-over-year growth of 11% and 16%, respectively.

EMC Revenues Chart
EMC Revenues Chart

EMC Revenues data by YCharts.

Heading into the report, Topeka Capital's Brian White is reiterating a "buy" rating and $38 price target on the stock, saying the company's product portfolio has "never been stronger" and that its momentum should keep running. White also expects EMC's majority ownership of virtualization specialist VMWare (NYS: VMW) to boost its results.

It looks like the shorts are bracing themselves for a solid quarter, as they've been scrambling to cover their bearish positions for the past couple of months. This is how EMC's short interest has changed on each of these settlement dates.


Feb. 15

Feb. 29

March 15

March 30

Short interest (shares)

130.9 million

100.4 million

51.4 million

37.5 million

Short interest (% of outstanding)





Source: Nasdaq.com

If EMC puts up figures in line with expectations, it would represent the ninth consecutive quarter of double-digit top-line and bottom-line gains.

Rival IBM (NYS: IBM) just put up its own earnings recently, beating the Street as promised. Big Blue's figures have mixed implications for EMC, as the blue chip said storage hardware fell 4%, while storage software jumped 18% within its systems and technology segment.

EMC also recently announced VFCache in a direct shot at Fusion-io (NYS: FIO) , mimicking the smaller company's unique storage architecture and implementation of flash memory in a move that validates the value in Fusion-io's technology.

The need for data storage won't be subsiding anytime soon as data continues to migrate toward the cloud, and I'm expecting that to show up in EMC's bottom line.

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At the time thisarticle was published Fool contributorEvan Niuholds no position in any company mentioned.Click hereto see his holdings and a short bio. The Motley Fool owns shares of EMC and International Business Machines.Motley Fool newsletter serviceshave recommended buying shares of VMware. The Motley Fool has adisclosure policy.We Fools may not all hold the same opinions, but we all believe thatconsidering a diverse range of insightsmakes us better investors. Try any of our Foolish newsletter servicesfree for 30 days.

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