UPDATE 4-EMC raises full-year profit, revenue outlook

* Raises 2010 EPS outlook to $1.18 vs Street view $1.14

* Raises 2010 rev forecast to $16.5 bln vs Street $16 bln

* Q1 ex-items EPS 26 cents vs Street view 24 cents

* Q1 revenue $3.9 bln vs Street view $3.7 bln

* Shares rise 1.3 percent
(Adds comments from CFO. Updates shares)

By Jim Finkle

BOSTON, April 21 (BestGrowthStock) – EMC Corp (EMC.N: ), the top
maker of corporate data storage equipment, raised its full-year
profit and revenue forecasts, sending shares up and boosting
confidence in the recovery in the technology sector.

The company also reported stronger-than-expected first
quarter results on Wednesday and said its customers were
spending on new projects instead of just focusing on cost
cuts.

“The fact that EMC is raising full-year guidance shows that
visibility is getting better. Demand is definitely improving.
Budgets are there,” said Wedbush Securities analyst Kaushik
Roy. “Tech in general looks like it will have a very good
year.”

EMC’s report stoked hopes ignited by recent strong results
and earnings forecasts from No. 1 chip maker Intel Corp
(INTC.O: ) [ID:nN1382801] and IBM (IBM.N: ) [ID:nN16143621], the
world’s biggest provider of technology services.

Hopkinton, Massachusetts-based EMC raised its forecast for
2010 profit excluding items to $1.18 per share from $1.12, and
boosted its revenue outlook to $16.5 billion from $16 billion.
Analysts had forecast a full-year profit of $1.14 per share on
revenue of $16 billion, according to Thomson Reuters I/B/E/S.

First-quarter net income nearly doubled to $373 million, or
18 cents per share, from $194 million, or 10 cents, a year
earlier. Profit, excluding special items, was 26 cents per
share, above the analysts’ average forecast of 24 cents as
sales surged in the United States.

Revenue at the company — whose rivals include IBM,
Hewlett-Packard Co (HPQ.N: ) and NetApp Inc (NTAP.O: ) — rose 23
percent from a year earlier to $3.9 billion, beating the
average estimate of $3.7 billion.

“During the first quarter, we saw customers move forward
with increased confidence, focusing not only on cost-cutting
initiatives, but beginning new innovative projects,” EMC Chief
Financial Officer David Goulden said in a statement.

He said that quarterly sales were buoyed by pent-up demand
from companies whose budgets had been frozen during the
recession. As a consequence, first-quarter sales might account
for a larger proportion of revenue than in a typical year.

U.S. sales climbed 29 percent to $2.1 billion, ahead of the
17 percent growth posted in the rest of the world, EMC said.

Its quarterly results were helped by stronger-than-expected
earnings from EMC’s VMware software subsidiary, which released
a rosier-than-expected quarterly revenue forecast late on
Tuesday. [ID:nN20125985]

Investors closely watch VMware’s results because the unit
is EMC’s most profitable. The software unit posted a gross
margin of 83 percent during the quarter, compared with 52
percent for the rest of EMC.

“The more VMware contributes to revenue, it’s an even
greater contributor to profitability,” said Edward Jones
analyst Bill Kreher.

VMware, the top maker of virtualization programs that
boosts the efficiency of computer hardware, said it was
benefiting from pent-up demand for its software that was
carried over from the first quarter. It cited strong
performances in Europe, China and Japan.

However the software maker was more cautious in its outlook
than EMC, expecting sales of new software to decline in the
second quarter from the first quarter. It warned that they
might drop again in the third quarter.

Sales at EMC’s storage equipment division, its biggest unit
grew 24 percent from a year earlier to $2.9 billion.

The company was slightly more bullish about the outlook for
technology spending.

It reiterated previous forecasts that global technology
spending will rise between 3 percent and 5 percent this year
and the markets where it sells products will expand by between
6 percent and 8 percent. But Goulden expects growth to come in
at the high end of those projections.

EMC shares rose 27 cents, or 1.4 percent, to $19.68 in
early Nasdaq trade. They’ve gained 10 percent so far this year,
in line with the gain in the Nasdaq Composite Index. VMware
climbed $1.04, or 1.8 percent to $57.56.

Stocks

(Reporting by Jim Finkle; Editing by Maureen Bavdek and Derek
Caney)

UPDATE 4-EMC raises full-year profit, revenue outlook