*EMC to cut 2,400 jobs, or 6 percent of its staff
*4th quarter earnings in line with estimates
*Excludes Q4 restructuring charge of 10 cents a share
*Shares rise 5 pct in extended trading
(Adds analyst comments, details on results. Updates shares)
By Jim Finkle
BOSTON, Jan 7 EMC Corp EMC.N, the world's
biggest maker of data storage equipment for businesses, said it
plans to cut 2,400 jobs, or 6 percent of its staff, to help
weather the global recession, and its shares rose 5 percent.
The Hopkinton, Massachusetts-based company also reported a
preliminary fourth quarter profit, excluding a restructuring
charge, which was in line with Wall Street Estimates.
EMC shares rose as investors cheered news that EMC was
moving to control costs and that it had met expectations for
the quarter, particularly after No. 1 chipmaker Intel Corp
(INTC.O) had warned earlier on Wednesday that its earnings fell
short of already diminished estimates.
"It's amazing news," said Kaushik Roy, an analyst with
Pacific Growth Equities. "They've done so much better compared
to other tech companies... EMC has delivered on its promises."
Jefferies & Co analyst Bill Choi said that he expects other
technology companies to add to the growing list of ones that
have announced restructuring plans.
"I think everyone is just going to have to restructure
their business to right-size for this current environment... We
are in a recession," Choi said.
Technology companies that have recently announced layoffs
include AT&T Inc (T.N), Motorola Corp MOT.N, Sony Corp
(6758.T) and Sun Microsystems JAVA.O.
EMC said it expects to report fourth quarter earnings,
excluding a restructuring charge of 10 cents a share, of 23 to
24 cents a share. That would be in line with the 23 cent
average forecast of analysts polled by Reuters Estimates.
It said that it recorded about $4 billion in revenue during
the quarter, which also was in line with Wall Street
The company, which will release full results on Jan 27, did
not issue earnings forecasts for the current year.
"Our goal is to position EMC for continued success
throughout the downturn and for even greater success during the
next economic growth cycle," Chief Executive Joseph Tucci said
in a statement.
The cost cuts will reduce annual spending by about $350
million in 2009 over 2008, the company said. That savings will
increase to about $500 million in 2010.
EMC shares rose to $11.78 in after-market trade, from their
New York Stock Exchange close of $11.18.
The technology giant -- whose rivals include NetApp Inc
(NTAP.O), IBM (IBM.N), Sun Microsystems and Hewlett-Packard Co
(HPQ.N) -- said that the layoffs would result in about $237
million in costs through the third quarter of 2010.
The company said it expects to incur additional
restructuring related costs of $76 million to $101 million by
the end of 2010.
(Additional reporting by Ritsuko Ando; editing by Carol