EMC reports strong Q4, full-year results

Strong growth by RSA Security and VMware subsidiary result in record EMC revenue

EMC reported record revenue for its fourth quarter on Tuesday, propelled by strong growth in its RSA Security division and VMware subsidiary.

EMC's consolidated revenue was $3.21 billion, 19 percent higher than the same period in 2005, which came in at $2.71 billion. Net income for the fourth quarter was $389 million, or $0.18 per diluted share, including two share tax benefits and a per-share restructuring charge.

Without the special gains and charges, net income came in at $0.17 per share, $0.02 higher than the fourth-quarter forecast provided by EMC in October and above the $0.16 per share forecast by analysts polled by Thomson First Call.

The company attributed its performance to double-digit growth in its systems, software and services offerings across its four major geographic regions. Quarterly revenue increased the most in Europe, the Middle East and Africa at 22 percent, followed by North America at 18 percent, Latin America at 14 percent and Asia Pacific and Japan at 13 percent.

The quarter is the first that incorporates revenue from RSA Security, which EMC purchased in June for $2.1 billion. RSA's revenues grew 26 percent over the quarter a year before, to $114 million.

EMC said RSA's growth comes from demand for consumer identity protection software stemming from new federal guidelines for online banking security.

Revenue for EMC's VMware subsidiary increased to $232 million, 101 percent more than a year prior. The jump comes from increased demand for VMware Infrastructure 3, VMware's virtualization software suite for servers and storage networks, plus VM Lab Manager, used to improve software development processes, EMC said.

Consolidated revenue for fiscal 2006 was $11.1 billion, a record and 15 percent higher than the $9.66 billion for fiscal 2005, EMC said. For fiscal 2006, EMC reported net income of $1.13 billion excluding special items, or $0.47 per diluted share.