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EMC Guides Low

EMC Corp. (NYSE: EMC) did as well as expected financially last quarter, but executives say the current quarter won't (see EMC Announces Earnings).

EMC reported revenue of $2.34 billion last quarter, up 19 percent from last year and 5 percent from the previous quarter (see EMC Growth Continues). Income of $293 million or $0.12 earnings per share (EPS) increased 52 percent from last year and 9 percent sequentially. The revenue and EPS matched analyst consensus posted on Reuters.

Guidance is a different story, though. EMC forecast $2.34 billion in revenue and $0.12 EPS this quarter. That represents no sequential growth, although EMC execs admit third-quarter revenue is usually about 2 percent to 3 percent greater than the second. Analysts expected $2.39 billion and $0.13 EPs in guidance.

Investors appeared more swayed by the guidance than earnings, as shares fell $0.67(4.65%) to $13.75 by late morning.

EMC attributed the poor guidance primarily to the strengthening of the dollar and its impact on foreign revenue, but other factors are in play. By EMCs estimation, currency impact will total $25 million to $40 million, while normal sequential growth would increase revenue by $50 million to $60 million. That means $10 million to $35 million of normal growth will be missing, regardless of currency impact.

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