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EMC Corporation Message Board

  • yo_roe yo_roe Jan 23, 2012 1:20 PM Flag

    Betting on a Miss

    Haven't been following EMC long, but in my view:

    - P/E is out of whack with peers, so further to fall
    - Software revs. should be terrible, Documentum having problems in the market
    - IBM missed on the top line, but has more diverse portfolio of products
    - EMC strengths are in the weak areas of the market, per other company's earnings
    - VMW, looking at price action/chart will not have a good report, our balance sheet (and PPS?) will suffer if they miss lofty expectations.

    Anyway, bought a bunch of OTM PUTS today. Good luck to all...

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    • You lost:

      EMC beats by $0.03, beats on revs; guides FY12 EPS in-line, revs in-line (EMC) 23.44 : Reports Q4 (Dec) earnings of $0.49 per share, excluding non-recurring items, $0.03 better than the Capital IQ Consensus Estimate of $0.46; revenues rose 14.0% year/year to $5.57 bln vs the $5.49 bln consensus. Co issues in-line guidance for FY12, sees EPS of $1.70, excluding non-recurring items, vs. $1.71 Capital IQ Consensus Estimate; sees FY12 revs of $22 bln vs. $22.02 bln Capital IQ Consensus Estimate. EMC expects to repurchase $700 mln of the co's common stock in 2012. "We expect to grow over two times faster than our estimate of IT spending growth [FY12]."

    • I try not predicting short term price movements but I feel the opposite of what you do, I think EMC sold off last month for no real reason, I also think they have not rebounded as much as the rest of the tech stocks. I think the current PE is at a historic low for EMC considering the growth of VMW.
      Looks like VMW had earning better than expected and IBM had mentioned that the storage segment of their business had out performed their expectations.
      I am not sure if that translates to a higher stock price or not...but indications are looking that way. Good luck.

    • Hope you didn't bet too much. VMW hit the ball out of the park, and EMC will follow up tomorrow morning with a great report. But then, everybody is entitled to their views. That's what makes a market. Good luck to you.

    • far looks like you are wrong. VMW had a really good quarter.

      • 3 Replies to Muhney
      • Agreed!!!

        VMW and EMC are up after hours!!! I have a feeling this will hit 25 early in the morning tommorow than trade back down towards 24. Quick trade though can easily make 4%, if EMC's earnings follows suit to VMW.

      • Right. They met, and guided at expectations, not above or below. A VMW miss was important element of my bet. Market likes it, esp. since I think the CITI downgrade had investors scared off last week.

        It will be interesting to see if VMW holds above $90 this week. I expect it will, but VMW used to consistently beat expectations - so EMC may not get rocket fuel, just unleaded boost.

        Any thoughts from people more knowledgeable than me on EMC prosepcts this quarter?

    • you think it will get whacked like stec did when they missed? i guess we'll know after the vmw report, they are the only thing exciting about emc, imo.

      • 1 Reply to stec_goes_boom
      • Maybe not a STEC-like whack, but it doesn't cost much to bet on a miss here, with good upside if they do.

        I think IBM (and ORCL) did poorly with their storage-related offerings (is that correct), and EMC may be holding up due to sympathy w/IBM. But IBM missed on the top line, and EMC may not be able to provide the type of positive guidance IBM did.

        I was betting WITH VMW on calls that expired last week, thinking it would rise higher into earnings. Weakness in VMW stock would concern me, if I were holding EMC right now.

        I'm usually wrong with my out-of-money option bets, by the way (although made a killing with ORCL).

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