EMC: Refocus Of Business Into Three Parts Gives Company A Strong 2Q


EMC on Wednesday reported strong second-quarter 2013 revenue and earnings growth and said an expected strong second half of the year will help the company meet its full-year expectations.

The storage heavyweight also explained how it is grouping its various businesses into three separate organization as a way to make it easier to manage those businesses while keeping the entire company focused on its overall mission. EMC also said that indirect channels are helping drive new business in more emerging parts of the market.

EMC reported revenue for its second quarter, which ended June 30, of $5.6 billion, up 6 percent compared to the second-quarter 2012 revenue of $5.3 billion.

 

[Related: EMC, VMware To Launch Pivotal Initiative As Separate $300M Firm]

The company also reported second-quarter GAAP income of $701 million, or 32 cents per share, up 8 percent from the $650 million reported last year. Second-quarter non-GAAP income was $907 million, up 8 percent over last year.

North American revenue grew 4 percent over last year, the slowest growth of any of EMC's geographical markets.

Joe Tucci, EMC chairman and CEO, said during the call that EMC is still seeing global uncertainty and tightening IT spending, with customers more and more likely to carefully scrutinize purchases.

EMC was able to help customers during the order by having inventory in place to meet the large customer demand late in the quarter caused by that scrutiny, but that was a less efficient way to do business than normal.

"That said ... we performed very well, especially when compared to the organic growth profile of our peers," he said.

EMC President and COO David Goulden talked at length about how EMC has divided its business into three parts, including EMC Information Infrastructure, VMware and Pivotal to help provide a more simplified look at how the company is doing and to more easily show how the different parts are working together.

"Overall, our solid top- and bottom-line performance in Q2 continue to demonstrate the soundness of our strategy, the importance of our federated business model and the focus and dedication of the EMC team globally," Goulden said.

By dividing the company's strategy and execution focus between the three, EMC is better able to focus each on its respective missions, Goulden said.

"Very importantly, this approach offers our customers horizontal solutions and more choice than they would get from others," Goulden said. "It's a unique model that leaves each to build its own products, market capabilities, and ecosystems necessary to win. And because the three share the same ultimate goal for customers--leveraging cloud, big data, and IT to maximize control, efficiency, and choice--their missions are clearly aligned."

NEXT: Three's (A) Company For EMC's Business