EMC saw its gross margins jump to 43.2 percent from 39.4 percent last quarter. While EMC says it expects its gross margins to remain flat in the second quarter, Seyrafi says the company's margins are likely to improve during the quarter.
Laura Conigliaro, an analyst with Goldman Sachs & Co., also sees EMC's fundamentals improving.
"With the DMX launch, EMC has essentially completed its product line overhaul and is now poised to recapture some of the ground lost over the last couple of years to key competitors like Hitachi Data Systems (HDS) and IBM Corp.," she wrote in a research note today. "At the same time, EMC's increased use of the channel and its deepening relationship with Dell Computer Corp. will allow for further market share gains as EMC continues to exploit pockets of demand not previously targeted by the company." (See EMC, Dell Keep Dancing and Dell Sings EMC Song.)
The company said it expects earnings for the second quarter of 3 cents a share, a penny more than analyst estimates, on revenue between $1.425 billion and $1.475 billion.
EMC continues to round out its software offerings, with the acquisition yesterday of tiny storage resource management (SRM) startup Astrum Software Corp.. Meanwhile, EMC's rumored bid for Legato Systems Inc. (Nasdaq: LGTO) is still keeping the industry guessing about what Hopkinton is going to do next (see EMC Sucks Up Astrum and Legato Up for Sale?).
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