EMC Cuts Forecast, Blaming Strong Dollar

Data storage products maker EMC slashed its full-year revenue and profit forecast, blaming a strong dollar, and reported quarterly results that fell below Wall Street’s expectations.

Nonetheless, the company’s shares were up almost 3 percent to $27.07 in midday trading on Wednesday.

EMC cut its full-year revenue forecast by about $400 million to $25.7 billion and adjusted profit by seven cents per share to $1.98.

Analysts on average were expecting a profit of $1.97 per share on revenue of $25.90 billion, according to Thomson Reuters I/B/E/S.

EMC got 47.5 percent of its 2014 revenue from outside the United States, according to a regulatory filing in February.

The dollar has risen about 9 percent against a basket of currencies in the first three months of the year.

EMC’s so-called “federated business model” comprises its main data-storage unit, VMware, enterprise security business RSA and cloud-computing software maker Pivotal.

The company said storage revenue in the first quarter, ended March 31, was hurt by geopolitical factors in Russia and China.

Still, total revenue rose to $5.61 billion in the quarter from $5.48 billion a year earlier.

Net income attributable to EMC fell to $252 million, or 13 cents per share, from $392 million, or 19 cents per share.

Excluding items, the company earned 31 cents per share. Analysts on average had expected a profit of 36 cents on revenue of $5.73 billion.

EMC in January had forecast a lower-than-expected profit for the year and said it would cut jobs.

VMware on Tuesday reported its slowest revenue growth in seven quarters as IT spending remained sluggish and a stronger dollar weighed on the value of overseas sales.

(Reporting by Sai Sachin R in Bengaluru; Editing by Savio D’Souza)

This article originally appeared on Recode.net.