EMC Continues Its String of Growth

Just because there's little mention of record-breaking performance, that doesn't make EMC's (NYS: EMC) first-quarter earnings any less impressive. The pasttwo 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 (NYS: 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 (NYS: 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.

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At the time this article was published Fool contributorEvan Niuholds no position in any company mentioned. Check out hisholdings and a short bioThe Motley Fool owns shares of IBM and EMC.Motley Fool newsletter serviceshave recommended buying shares of VMware. The Motley Fool has adisclosure policy. We Fools don't 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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