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By | Ashlee Vance 20th April 2006 17:20

EMC turns to storage of all things for Q1 growth

Software story put on hold

EMC produced another workmanlike effort in its first quarter, hiking revenue by 14 per cent and enjoying unusually strong hardware sales.

The big daddy of storage brought in $2.55bn during the first quarter, which compares to $2.24bn reported in the same period last year. Such double-digit percentage gains in revenue have become a tradition at EMC. Much of the past success stems from EMC's growing software businesses, although the core hardware line did most of the dirty work this quarter.

"The power of our balanced, solutions-focused business model is evident," said EMC CEO Joe Tucci. "Our sustained focus on information lifecycle management (ILM) and expanding portfolio of best-in-class products and services enabled us to deliver double-digit revenue growth for the 11th quarter in a row."

EMC also posted a $273m profit during the quarter, which compares with last year's profit of $182m, when the results are normalized for EMC's stock option expenses this year.

The company's hardware business grew 20 per cent during the quarter to $1.23bn - the biggest gain in more than two years. Much of the growth came from EMC's new Symmetrix DMX-3 family of systems.

Software revenue rose 11 per cent to $925m, and services revenue grew 6 per cent to $396m.

The VMware subsidiary was once again the star of the software group with revenue rising 64 per cent to $131m. We still can't help but wonder when EMC will spinoff VMware and reward shareholders.

EMC expects second quarter revenue to be at least $2.66bn. ®

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