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EMC net income plummets 32% in Q1

EMC storage servers flash revenue
EMC would love to 'flash' forward to Q1 2015
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EMC Corporation reported Q1 2014 net income during the first quarter of 2014 was $392 million (about £233m or au$422m), a 32% decrease from $580 million (about £345m or au$624m) in Q1 of 2013. EMC revenue during the quarter was $5.5 billion (about £3.3b or au$5.9b), an increase of 2% compared with the same quarter last year.

US revenue, which amounted to 52% of EMC overall revenue, was flat in the first quarter. International revenue increased 3%. EMC's Information Infrastructure business revenue declined 3% in Q1. The Information Infrastructure business includes the Information Storage business, which also reported a revenue decline of 3%.

EMC is the world's biggest producer of storage machines, an industry that has become increasingly competitive despite a reduction in sales. As a result, EMC is focusing on flash-based storage by replacing storage machines with software and data-analysis programs, according to a note written by Daniel Ives, an analyst at FBR Capital Markets.

1000 jobs cut

EMC disclosed in January that it would cut approximately 1000 jobs as part of a restructuring plan. During the quarter, those cuts resulted in charges of $100 million to $120 million, including cash payments of $95 million to $114 million, the company said. EMC employs approximately 60,000 people.

"EMC is at the threshold of expansive opportunity. While planned business practice changes had a negative impact on year-over-year revenue and…we are very confident we are on the right track," said David Goulden, chief executive of EMC's Information Infrastructure and EMC's CFO, in a statement.

EMC is the majority owner of VMware, which reported an increase in revenue of 14% to $1.36 billion (about £810m or au$1.45b) during Q1 2014, compared with the same quarter last year. Operating income for VMware in Q1 was $241 million (about £143m or au$257m), an increase of 51% from the same quarter last year.