EMC 2013 Outlook Falls Short, Plans $75 Million Restructuring
Earnings per share were 54 cents, compared with an estimate of 52 cents; sales were $6 billion versus an expectation of $5.98 billion. But its outlook for 2013 missed expectations. Earnings will be $1.85 a share this year, short of the $1.90 analysts were expecting, on expected sales of $23.5 billion.
EMC also announced plans for a corporate restructuring that will include a reduction in force, though it didn’t say how many people will be affected. The plan will be completed by the end of the first quarter of the year. EMC said it expects to take an $80 million charge for restructuring costs.
It also said that VMware, the software unit of which it is a majority shareholder, will also restructure in order to streamline its operations. It expects to take a charge in the range of $70 million to $80 million to reduce personnel. It said yesterday that job cuts could reach 900. Another charge said to be in the range of $20 million to $30 million will cover costs associated with exiting certain lines of business.
EMC shares fell more than 4 percent in pre-market trading to $24.10. Shares of VMware are down more than 18 percent to $80.36.