EMC (NYSE:EMC) announced its results for the most recent quarter on October 24, 2012. EMC and its subsidiaries deliver and support a range of information infrastructure technologies and solutions.
Investors should care about a company's quarterly earnings because it shows the state of the business over the past 90 days and provides guidance for the following 90 days. SEE: 5 Tricks Companies Use During Earnings Season
The Numbers: EMC's EPS beat estimates and the company's revenues fell in line with predictions. The company reported adjusted net income of 40 cents per share versus the 34 cents per share estimate and revenues of $5.28 billion versus the $5.29 billion estimate. Revenue climbed 6% from the same period last year. EMC's revenue has grown during each of the past four quarters on a year-over-year basis. For the third quarter, the company reported net income of $626.34 billion. According to the reported number, this is up 103316% from last year's figures. Last quarter marked the third in a row of rising net income.
Management Quote: David Goulden, EMC President and Chief Operating Officer, said, "For the third quarter, EMC's business continued to grow faster than overall IT spending growth and we gained market share in what turned out to be a more cautionary environment than we expected heading into the quarter. We remain extremely confident in our strategy, best-of-breed product portfolio and solid operational and financial model. Going forward, we fully believe that EMC will continue to grow faster than our addressable markets and take share, reinvest for the future, and deliver earnings leverage for shareholders."
A Look Back: Net income has increased 20683.7% year-over-year on average across the last five quarters. The biggest gain came in the most recent quarter, when income climbed 103316% from the year-earlier quarter.
Looking Ahead: When earnings estimates stay consistent leading up to earnings season, this usually shows analysts accurately predicted earnings estimates and business is stable. Be cautious though as this may also be a warnings sign that earnings could come at a huge surprise to the upside or downside as analyst did not correctly predict earnings. Steady earnings estimates mean there is not enough change going on with the company to make analysts change their opinions. When earning estimates are steady, investors can look at the revenue trend for a more fundamental indicator. For the fiscal year, the average estimate has been unchanged at $1.42 a share.