EMC reported double-digit revenue growth for the third quarter on Wednesday and forecast another revenue gain in the fourth quarter despite global economic woes.
However, the company noted a dip in some areas at the end of the quarter and expects trouble ahead for the industry.
"We are seeing some signs of a slowdown in IT spending in many parts of the world and I believe the slowdown will continue into 2009," said EMC Chairman, President and CEO Joe Tucci, on a conference call following the results announcement. Tucci said he expects IT spending overall to grow between 1 percent and 3 percent in 2009.
The company's revenue grew 13 percent from last year's third quarter to US$3.7 billion (£2.3 bn), with 11 percent gains in both its information storage business and its RSA security division.
Sales gains in the U.S. lagged behind the rest of the world, with revenue growing 7 percent year-over-year in the U.S. compared with 19 percent for areas outside. The company got 46 percent of its revenue from outside the U.S. Revenue increased 20 percent in Europe, the Middle East and Africa, 19 percent in Asia-Pacific and Japan, and 27 percent in Latin America, EMC said.
"Even with a challenging economic environment ahead, we remain confident and well positioned to compete effectively, continue winning business and outpace our peers in the marketplace," Tucci said in a prepared statement.
In the last three weeks of September, EMC saw a slowdown among some customers, which Tucci attributed to caution caused by the stock meltdown and the weak credit market. Some large enterprises postponed purchases and some financial services companies held off on their spending amid a wave of consolidation, he said. On a worldwide basis, sales to financial services companies actually grew modestly in the third quarter, though not for Wall Street investment banks. Commercial customers and small and medium-sized businesses also became cautious, Tucci said.
However, Tucci said he believes the continuing growth of data within enterprises will insulate storage, as well as virtualisation and compliance, from an overall slump in IT spending.
Among EMC's product lines, sales of the high-end Symmetrix storage systems were flat, while the midrange Clariion line had 12 percent higher revenue than a year earlier, due partly to the launch of the Clariion CX4 line in August, said Chief Financial Officer David Goulden. Network-attached storage revenue rose 40 percent, with EMC gaining market share, he said.
The company's content management and archiving business had flat revenue, and EMC expects that market to continue to be affected by weakness in the overall enterprise software business, Goulden said. But revenue from professional services rose 23 percent from a year earlier, he said.
Tucci said he was pleased with the performance of EMC's VMware business, which on Tuesday reported third-quarter results above expectations and stuck to its earlier forecast for the fourth quarter. Despite a reorganization and hiring freeze at the virtualization software company, Tucci said EMC has no plans to spin off VMware.
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