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EMC Restructures, Guides Q4

Expects 4Q08 revenues of approximately $4B, approximately 8% revenue growth compared with the Q3; announces layoffs
January 09, 2009

HOPKINTON, Mass. -- EMC Corporation (NYSE: EMC - News), the world leader in information infrastructure solutions, today announced that it expects fourth-quarter 2008 revenues of approximately $4 billion, representing an EMC record for quarterly revenue, approximately 8% revenue growth compared with the third quarter of 2008, and 4% growth over the same period a year ago. EMC also announced that it expects in the fourth quarter:

  • GAAP earnings per diluted share of $0.13 to $0.14, including the impact of a $0.10 restructuring charge, described below.
  • Excluding the restructuring charge, non-GAAP earnings per diluted share of $0.23 to $0.24.
  • Excluding the restructuring charge, stock-based compensation and intangible asset amortization, non-GAAP earnings per diluted share of $0.30 to $0.31(1).

    These preliminary revenue and EPS results, excluding the effect of the charge, are in line with estimates the company provided on October 22, 2008.

    "We are very pleased with our preliminary Q4 financial results," said Joe Tucci, EMC Chairman, President and CEO. "We were able to generate all-time record revenue and strong sequential revenue growth against the backdrop of a challenging global economy. Customers are telling us that information infrastructure and virtualization products and solutions are at or very near the top of their IT spending priorities. This, coupled with the technological advantage and quality of EMC's solutions and the strength of our sales and service organizations, helped us achieve our Q4 financial goals."

    To improve the competitiveness and efficiency of its global business, EMC also announced a restructuring program to further streamline the costs related to its Information Infrastructure business, which does not include VMware. EMC expects the program to reduce costs from its 2008 annualized rate by approximately $350 million in 2009, increasing to approximately $500 million in 2010. The program's focus is to consolidate back office functions, field and campus offices; rebalance investments towards higher-growth products and markets; reduce management layers; and further reduce indirect spend on contractors, third-party services and travel. The restructuring program will reduce EMC's global Information Infrastructure workforce by approximately 2,400 positions, or about 7% of its headcount as of September 30, 2008.

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