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EMC Shares Surge

EMC Corp. (NYSE: EMC) shares shot up almost 10 percent Tuesday, to $7.44 a share, after the company announced stronger-than-expected preliminary results, driven by Clariion sales, for the fourth quarter of 2002 (see EMC to Beat Q4 Expectations).

For the quarter ended December 31, 2002, EMC expects to report total revenue of more than $1.47 billion, and earnings in the range of $0.01 to $0.02 per diluted share, excluding a previously announced restructuring charge of approximately $160 million. The charge is primarily associated with the previously announced workforce reduction and consolidation of facilities.

Including the charge, the net loss for the fourth quarter is expected to be in the range of $0.02 to $0.04 per share. These preliminary revenue results compare with revenue of $1.26 billion in the third quarter of 2002.

In a prepared statement, EMC president and CEO Joe Tucci said, "We are encouraged by the strength of these results. Overall, customer spending was better than we anticipated in the fourth quarter." He said demand was particularly strong for the company's newly introduced Clariion CX family systems (see EMC Moves Downmarket With CX400 and EMC Launches Clariion CX200).

"It makes sense that the Clariion would be strong, as it's aimed at the midmarket, which is growing the most... There is probably a pause in Symmetrix sales, compared with Clariion, in anticipation of the new Symm box," says Steve Berg, analyst at Punk Ziegel & Co. (see EMC Readies Symmetrix Upgrade).

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