The Gory Details on EMC's Double Miss

Seth Jayson, The Motley Fool
Updated

EMC (NYS: EMC) reported earnings on Oct. 24. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended Sep. 30 (Q3), EMC missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew and GAAP earnings per share grew.


Gross margins grew, operating margins contracted, net margins contracted.

Revenue details
 EMC tallied revenue of $5.28 billion. The 35 analysts polled by S&P Capital IQ hoped for sales of $5.47 billion on the same basis. GAAP reported sales were 6.0% higher than the prior-year quarter's $4.98 billion.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $0.40. The 38 earnings estimates compiled by S&P Capital IQ averaged $0.42 per share. GAAP EPS of $0.28 for Q3 were 3.7% higher than the prior-year quarter's $0.27 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 62.3%, 70 basis points better than the prior-year quarter. Operating margin was 17.5%, 70 basis points worse than the prior-year quarter. Net margin was 11.9%, 30 basis points worse than the prior-year quarter.

Looking ahead
 Next quarter's average estimate for revenue is $5.98 billion. On the bottom line, the average EPS estimate is $0.52.

Next year's average estimate for revenue is $21.67 billion. The average EPS estimate is $1.69.

Investor sentiment
 The stock has a five-star rating (out of five) at Motley Fool CAPS, with 3,680 members out of 3,812 rating the stock outperform, and 132 members rating it underperform. Among 720 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 704 give EMC a green thumbs-up, and 16 give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on EMC is buy, with an average price target of $31.45.

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The article The Gory Details on EMC's Double Miss originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of EMC. 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.

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