Shares of EMC (EMC) are up 82 cents, or 3.6%, at $23.50 in early trading after the company this morning beat consensus revenue and earnings estimates for its Q3, and forecast this year’s revenue and EPS in line.
Revenue in the three months ended in September rose 18% to $4.98 billion, yielding EPS of 37 cents, excluding some costs.
Analysts had been modeling $4.9 billion and 36 cents.
For the full year, the company reiterated an expectation that revenue will top $19.8 billion, and EPS will top $1.48 per share. That is roughly in line with the consensus $19.85 billion and $1.48.
EMC is also being helped by favorable Q3 results last night from software maker VMWare (VMW), in which EMC holds a 79% stake. VMWare reported Q3 results ahead of expectations, and forecast the current quarter’s revenue above estimates. VMWare also said, however, that Q1 revenue next year may fall short of analysts’ estimates.
VMWare shares are up 1% at $90.54 in early trading, even though the stock received one downgrade this morning, from Jefferies & Co. The stock was also upgraded to “Conviction Buy,” however, at Goldman Sachs.
In a note to clients this morning, Citigroup’s Richard Gardner remarked that the company’s margins reflected “impressive leverage,” with gross margin of 63% and operating margin of 24% topping his estimates for 62.8% and 23.5%, respectively.
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