Dive Brief:
- EMC Corp. announced discouraging first quarter results Wednesday, but reassured the public that Dell's multibillion-dollar acquisition is still on.
- The company attributed the disappointing results to an excess of unfulfilled orders at the end of the quarter.
- EMC CFO Denis Cashman said, that the company had $75 million of unshipped storage product orders because of "timing of bookings" within the quarter, according to the Wall Street Journal.
Dive Insight:
Revenue dipped slightly, falling 2.5% to $5.48 billion. But, according to Thomson Reuters, analysts had expected 33 cents per-share profit on $5.63 billion in sales.
EMC CEO Joe Tucci reassured the public that the merger is still moving forward and is expected to be complete in October. Tucci said the drop in EMC’s value will not affect the deal, which is still set to happen under the "original terms" and in the same time frame.
"Integration planning has accelerated," Tucci said to investors. "The leadership team has been established, and we've received the vast majority of antitrust approvals required."
The merger also includes EMC’s controlling stake in VMware. But VMware has seen its own set of problems since the merger was first announced last October, and it’s share price has also dropped significantly.
For the first quarter, EMC reported a profit of $268 million, up from $252 million a year earlier. Earnings per share were flat from the previous year, however, and revenue slipped. Meanwhile, VMware sales grew slightly—up 5% from a year earlier.
Ahead of the merger, both Dell and EMC have unloaded businesses. Earlier this month EMC said it was looking to sell Documentum, while in March Dell announced it would sell its IT services subsidiary, Dell Services, to NTT Data for $3.06 billion.
