Like the heavyweight boxer still standing after repeated blows to the
head, EMC Corp. (NYSE: EMC)
has recently absorbed countless jabs from competitors and analysts. The
storage giants stock is apparently so numb from a constant barrage of bad
news that the latest broadsides failed to rattle it much. In fact,
the share price had been rising, closing Tuesday at $13.45, up 34 percent
from its Sept. 21 low of $10.01.
But lets see how EMC bounces back from todays trouncing. EMC
officials confirmed in their third-quarter earnings call that business has
been worse than anyone had imagined following the companys pre-announcement a
month ago. And the near-term outlook doesnt appear much brighter. EMC had a prorated loss of $270 million, or 12 cents a share, worse than the worst of
downwardly revised analysts' estimates (see EMC Posts Q3 Loss). Before the market opening, EMC was
trading down 76 cents (5.65%) to 12.69
The predictions of the 31 analysts polled by First Call
ranged from a loss of 11 cents a share to a 1 cent profit. EMC revenues came
in at $1.21 billion, at the bottom of the analysts' range of $1.2 billion to
$1.8 billion.
The situation was so bad that EMC announced an increase in planned job
cuts to 4,000, up from the 2,400 announced last month. Thats in addition to
1,600 cuts earlier this year. The company is slashing marketing by one third
from its peak and cutting manufacturing significantly.
EMC is also eliminating redundancies. For instance, it is merging research
and development for its two network attached storage (NAS) units. Officials
say that as part of the reorganization, they are increasing the direct sales
force for enterprise systems while cutting the number of channel
partners.
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