EMC Corp. Sees Income Slip Despite Record Revenue
Posted on: Wednesday, 25 January 2006, 21:00 CST
By Andrea Stape, The Providence Journal, R.I.
Jan. 25--Despite recording record revenue for the fourth quarter of last year, EMC Corp. took a $274-million charge from layoffs, tax restructuring and an acquisition, the company reported yesterday.
The charges dropped EMC's net income to $148 million, down 54 percent, compared with the fourth quarter of 2004. However, the Hopkinton, Mass.-based data-storage provider saw record revenue in the last quarter of 2005, reporting $2.71 billion in revenue, 15 percent higher than the fourth quarter of 2004, due in large part to sales of software and services.
Earlier this month, EMC forecast the strong fourth-quarter revenue and announced the layoffs but estimated the charge would be $5 million less. The company is cutting 1,000 people worldwide as it attempts to trim redundant positions, remove excess management and rebalance its work force to focus more on software and services. The company is taking an $80-million charge for the layoffs.
EMC also took a $14-million charge related to its acquisition of Captiva Software Corp. and an $180-million income-tax charge.
EMC also said yesterday it expects to see sales jump significantly this year, as companies start spending more on technology. It forecast sales of $11.1 billion to $11.3 billion for 2006. The forecast caused investors to send the stock up 39 cents yesterday to close at $13.65 a share.
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EMC,
Source: Providence Journal
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