Investors Give Thumbsdown To EMC Corporation (NYSE:EMC)
EMC Corporation (NYSE:EMC) is the largest data-storage equipment company in the world. The company reduced its full-year 2013 guidance citing the 2-week long U.S government shutdown. In the wake of this news, there was a drop of 4.75% in the company’s shares on Tuesday.
Results-not up to the mark
The company reported its quarterly results which were lower than expected and that said that the shutdown was the cause of the miss of around $120M, on their revenue projection. EMC Corporation (NYSE:EMC) also said that they do not expect to recover this loss. David Goulden, the company’s Chief Operating Officer said that they had been expecting a few orders from the Federal Government to close, towards the end of the quarter, which did not take place.
The Revenue that comes in from the United States government accounts for approximately 10%-155 of EMC Corporation (NYSE:EMC)’s total revenue in the Q3 in comparison with the 5% in the rest of 2013.
Revenue from government business
Joe Tucci, the company’s Chief Executive Officer said that around 70% of the company’s revenue that comes from the government relies on the short-term orders that get competed and are also billed within that very quarter. This also means that it is not possible to cover that revenue in the following quarter.
Full-year forecast cut
The company reduced its forecast for the entire year from $1.85 to $1.80/share and the revenue projection from $23.5B to $23.25B. On an average, analysts are projecting the company to make a profit of $1.86/share on $23.44B in revenue. The company said that its projection has also taken into account the corporate-cutbacks in Information Technology budgets and the uncertainty about QE.
EMC cut its full-year profit forecast to $1.80 per share from $1.85 and its revenue forecast from $23.5 billion from $23.25 billion. On an average, analysts have projected a profit of $1.86/share on revenue of $23.44B.