It was a mixed bag for EMC Corporation (EMC) during its fourth quarter earnings announcement. The company boasted a 35% jump in fourth quarter profit from the previous year, thanks to widespread revenue growth. The company did warn that 2008 earnings would likely be below current analyst targets.
EMC is a leading data storage vendor. Net income for the company was $525.7 million during the quarter, which is 24 cents per share. Their fourth quarter 2006 earnings were $388.8 million, or 18 cents per share.
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According to Thomson Financial, who provides leading stock investing research, analysts were widely expecting earnings of 22 cents per share during the fourth quarter. Thanks to a 19% surge in revenue, from $3.21 billion to $3.83 billion, the company was able to easily beat the estimates.
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EMC is a recognized leader in many data storage product categories. They experienced strong growth in many key areas, including systems, which accounted for 44% of their further quarter revenue, and software license and maintenance, which accounts for another 40% of the company’s revenue.
While analysts expect earnings of 82 cents per share and revenue of $14.7 billion during 2008, EMC is a bit more cautious with its forecast of 78 cents per share on revenue of $15 billion. EMC shares have dropped a bit since their slightly lower than anticipated forecast.
The greatest benefit to EMC from a growth perspective is anticipated growth of nearly 60% per year for computer storage. Already a big computer storage systems leader, the company is looking to leverage its market leadership to expand into high end flash memory drives for business. Flash memory technology is one of the fastest growing business and technology segments. Many stock trading professionals are adding flash memory based companies to their trading portfolio.
The good news for the stock investing community is that analysts have given the stock help with current one year target price expectations over $22. Given its current low market price below $16, the stock is a great fit for a long-term investment strategy.
Many stock investing professionals believe that once the market looks past the lowered guidance, and focuses on the underlying financial indicators of the company, buyers will take over.
Mad Money stock guru Jim Cramer’s recent stock trading tips include advice to be cautious about investing in technology stocks at the present time. In spite of his advice for technology caution, Cramer himself added 700 shares of EMC to the Action Alerts Plus stock trading portfolio that he buys for. This suggests that EMC, and perhaps flash memory entities are considered to be among the elite tech stocks by leading analysts.
EMC has an impressive price to earnings ratio and market cap making it seem like a stock steal at its current market price. Many individuals are adding it to their personal stock portfolio, following the lead of professional traders who believe in its long-term potential.
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