EMC (NYSE:EMC) released its Q2 earnings on July 24, reporting consolidated revenue of $5.31 billion, a 10% increase y-o-y, driven by growth in Big Data and cloud computing with the high-end and mid-end storage network revenue growing by 7%. This is also the tenth consecutive quarter of double digit y-o-y revenue growth for EMC. The company generated operating cash flows of $1.24 billion and free cash flows of $958 million, a y-o-y increase of 16% and 36%, respectively. It has maintained its outlook for FY 2012 at $22 billion in revenues.
VMware revenues grew by 22% y-o-y to $1.23 billion. Consolidated Q2 revenue from the U.S. increased 14% y-o-y to $2.9 billion or 54% of total revenues. Revenue from business operations outside of the U.S. increased 5% y-o-y to $2.5 billion or 46% of Q2 revenues. 
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- EMC Q3 Earnings: Core Storage Stagnates, VMware Still Drives Growth
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- Dell Buys EMC In A Mammoth $67 Billion Deal, VMware To Remain Public
Outlook For 2012
EMC expects 2012 revenues of $22 billion with operating income of 17.5% of revenues or $3.85 billion. Further, it expects consolidated operating cash flows of $6.2 billion for 2012 and free cash flow of $4.9 billion for 2012. It also plans to repurchase $700 million of the company’s common stock in 2012.
Trends to Watch For
EMC acquired XtremIO in May 2012 to improve its flash memory storage offering, and this is reflected by growth in its high-end storage network. Through its Velocity program, the company has signed up major providers such as Verizon-Terremark, Singapore Telecommunications and AT&T to provide private cloud networks, and we expect this division to grow significantly in the second half of 2012. EMC is already the market leader in global external disk storage systems market, and we expect it to maintain its leading position.
We currently have a $52 Trefis price estimate for EMC, which is significantly higher than the current market price.Notes: