EMC is a world leader in high end data storage solutions and develops, delivers and supports the information technology. It has had flattering EPS and growth projections from analysts but the recent revenue surprise brought it down a notch. Projections still look good for the company, but with the challenges it faces, can it continue to grow this year?
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The company came out strong reporting a profit of $586.8 million, or $0.27 per share. This was great compared to a year earlier when it was $477.1 million, or $0.21 per share. And again recently they beat earnings estimates of $0.31 to $0.37. EMC boasted consistent double figure increases in revenue for each of the past four quarters. The last three quarters showed an overall 34.2% increase in profits. But the stock dropped after earnings. It appears the street wanted more.
Investing 101 would tell us that EPS is easier to prop up and make look good. A company can easily just cut costs to increase its earnings, but do little to improve its top line (revenue). But, if the company is not selling its product, there is not growth.
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