Johannesburg, 03 Feb 2015
Story highlights:
* Record Q4 revenue of $7 billion, up 5% year over year
* Q4 GAAP EPS up 17% year over year; Q4 non-GAAP EPS up 15% year over year
* EMC Information Infrastructure, VMware and Pivotal Q4 revenue up 2%, 16% and 18% year over year, respectively
* Q4 revenue from Emerging Storage grew 40% year over year; full-year 2014 revenue grew 52% year over year
EMC (NYSE:EMC) has reported fourth-quarter and full-year 2014 financial results. Record fourth-quarter consolidated revenue was $7 billion, up 5% year over year. GAAP net income attributable to EMC was $1.15 billion, an increase of 12% compared with the year-ago quarter. GAAP earnings per weighted average diluted share was $0.56 in the fourth quarter, up 17% year over year.
Non-GAAP1 net income attributable to EMC was $1.4 billion, an increase of 10% compared with the year-ago quarter.
Non-GAAP1 earnings per weighted average diluted share was $0.69, up 15% compared with the year-ago quarter.
Full-year 2014 revenue was $24.4 billion, an increase of 5% year over year. GAAP net income attributable to EMC for 2014 was $2.7 billion, down 6% year over year, and GAAP earnings per weighted average diluted share was $1.32, down 1% year over year.
Non-GAAP2 net income attributable to EMC for 2014 was $3.9 billion, an increase of 1% year over year, and non-GAAP2 earnings per weighted average diluted share was $1.90, an increase of 6% year over year.
For 2014, EMC generated $6.5 billion in operating cash flow and $5 billion in free cash flow3. The company closed 2014 with $14.7 billion in cash and investments. In the fourth quarter EMC repurchased approximately $1.6 billion worth of its common stock and returned approximately $240 million to shareholders via a quarterly dividend. Over the course of 2014 EMC returned $3.9 billion to shareholders through the repurchase of $3 billion worth of its common stock and approximately $900 million via quarterly dividends.
Joe Tucci, Chairman and CEO, said: "EMC demonstrated solid performance in the fourth quarter and over the course of 2014. Our strategy is working well despite a challenging and rapidly changing IT environment. The company stands at the forefront of our industry with a leading portfolio of solutions and services to help customers optimise their existing infrastructures and build new ones that take advantage of opportunities created by cloud, mobile, social and big data. We enter 2015 financially strong and well positioned to continue capturing greater market share."
Zane Rowe, EMC CFO, said: "EMC is establishing a solid foundation for the future, while also delivering near-term growth as we transform our business. Thanks to the unified team effort, in 2014 EMC grew revenue and EPS, gained share, increased our dividend and accelerated our buyback program - returning $3.9 billion to shareholders. Our strong operational results were impacted by currency fluctuations and EMC's investments in high-growth businesses. While we expect these factors to continue to impact 2015 results, we remain focused on driving growth for shareholders and delivering best-in-class solutions for customers."
David Goulden, CEO of EMC Information Infrastructure, said: "In 2014 EMC II invested aggressively in key technology areas, innovated across all businesses, and continued to extend our lead in slower-growing but massive storage markets while making enormous strides in faster-growing areas like all-flash, where we are also the market segment leader. We delivered new and differentiated solutions, like the Enterprise Hybrid Cloud solution to help customers bring cloud agility and flexibility to existing applications and a platform for rapid deployment of new applications - a key differentiator for EMC. We also continued our leadership in converged infrastructure, helping customers transform their IT infrastructure by significantly reducing time to deploy and cost to manage new IT infrastructure. Collectively, this will serve us well in 2015 and ensure our continued lead in information infrastructure well into the future."
Fourth-quarter and full-year 2014
* EMC Information Infrastructure business fourth-quarter and full-year 2014 revenue were each up 2% year over year. Information Storage revenue in the fourth quarter grew 3% year over year and 2% for the full year. Emerging Storage4 revenue in the fourth quarter grew 40% year over year and 52% for the full-year 2014, achieving $2.3 billion in revenue over the course of 2014, with notably strong growth for EMC XtremIO, EMC ViPR, EMC Isilon and EMC ScaleIO. Within this, EMC XtremIO bookings more than doubled to nearly $300 million in the fourth quarter compared with the previous quarter, thereby securing a commanding lead over the all-flash array market segment. Unified and Backup and Recovery revenue grew in the fourth quarter and was up 4% for the full-year 2014. Within this, EMC VNX systems continue to do well, adding approximately 2 000 new customers in the fourth quarter, with the vast majority being new to EMC storage. RSA fourth-quarter revenue grew 4% year over year and grew 5% for 2014. Converged infrastructure offerings from VCE and VSPEX continued to drive revenue growth in the fourth quarter, with VCE adding a record number of new customers in the quarter.
* VMware continued its rapid growth trajectory with fourth-quarter and full-year 2014 revenue within EMC each up 16% year over year as customers continue investing in software-defined data centre, hybrid cloud solutions and end-user computing.
* Pivotal grew fourth-quarter revenue 18% and full-year 2014 revenue 27% year over year, and remains the fastest growing of EMC's federated businesses, benefiting from customers leveraging the portfolio to build third platform applications that are transforming their business.
Global highlights
EMC's consolidated fourth-quarter revenue from North America grew 6% year over year, and within this revenue from the United States was up 7% year over year. Revenue from EMC's Europe, Middle East and Africa region grew 6% year over year, Asia Pacific and Japan grew 2% year over year and Latin America grew 8% year over year. Revenue from the BRIC +13 markets grew 7% year over year in the fourth quarter.
Business outlook
EMC's business outlook reflects the negative impact of anticipated foreign currency fluctuations and the consolidation of VCE results. Further detail will be provided during today's 8:30 a.m. ET live Web cast for investors, which is available on the EMC Investor Relations Web site (http://www.emc.com/ir).
The following statements are based on current expectations. These statements are forward-looking, and actual results may differ materially. These statements do not give effect to the potential impact of mergers, acquisitions, divestitures or business combinations that may be announced or closed after the date hereof. These statements supersede all prior statements made by EMC regarding 2015 financial results.
All dollar amounts and percentages set forth below should be considered to be approximations.
* Consolidated revenues are expected to be $26.1 billion for 2015.
* Consolidated GAAP operating income is expected to be 13.7% of revenues for 2015 and consolidated non-GAAP5 operating income is expected to be 21.4% of revenues for 2015.
* Consolidated GAAP earnings per weighted average diluted share are expected to be $1.27 for 2015 and consolidated non-GAAP5 earnings per weighted average diluted share are expected to be $1.98 for 2015.
* The consolidated GAAP income tax rate is expected to be 23.0% and the consolidated non-GAAP5 income tax rate is expected to be 23.6% for 2015. This assumes that the US research and development tax credit is ex tended during 2015.
* The weighted average outstanding diluted shares are expected to be 1.96 billion for 2015.
* EMC expects to repurchase an aggregate of $3.0 billion of the comp any's common stock in 2015.
Resources
* The fourth-quarter and full-year 2014 webcast will be available for replay on the EMC Investor Relations Web site at http://www.emc.com/ir
* EMC financial results are also available on the U.S. Securities and Exchange Commission Web site
* Visit http://ir.vmware.com for more detail on VMware's fourth-quarter 2014 financial results
* Download the EMC Investor Relations App here
* Visit EMC Pulse for breaking product and technology news from EMC
* Visit EMC Reflections for executive insight on business and IT trends
* Connect with EMC via @EMCCorp, LinkedIn and Facebook
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