EMC continues to deliver strong growth
Published: 25 Jul 2007 12:52 BST
After 16 consecutive quarters, EMC continued to deliver double-digit growth with its second-quarter results, published on Tuesday.
While the company's virtualisation and security divisions, VMware and RSA, showed strong growth, the content management and archiving business, led by Documentum, recorded only a five percent year-on-year increase in revenue, to $174m (£84.7m).
Total revenue for the second quarter of 2007 was $3.12bn, 21 percent higher than the $2.57bn reported for the second quarter of last year. Net income for the second quarter of 2007 was $334.4m, up 33 percent from a year ago.
Operating cash flow of $622m was an increase of 59 percent, and free cash flow of $422m was an increase of 123 percent, compared with the same period a year ago.
Out of EMC's diverse businesses, the only one that showed disappointing growth was content management, including Documentum, with five percent growth, a result that may be acceptable in other years but not when compared to EMC's other businesses. EMC is now pinning its hopes on the success of its next-generation software, Documentum 6.
In contrast, EMC subsidiary VMware saw its business grow by a massive 89 percent year-on-year to $298m. Analysts and the market in general have been watching VMware closely as it attempts the difficult feat of staying independent enough to reassure the many suppliers who compete with EMC but remain customers of its subsidiary.
During the quarter, VMware also broadened its product portfolio with new releases of its virtual desktop software, and continued to expand its network of technology and distribution partners. VMware recently announced that Intel Corporation, through its global investment arm, Intel Capital, has agreed to become an investor.
RSA Information Security, the third company bought by EMC around the time VMware and Documentum were purchased, saw revenues for the second quarter of 2007 grow a very respectable 21 percent. The division generated $125m in revenue.
Along with virtualisation, the information security business should be doing well in the current market as companies still have major concerns about the security of information.
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