SCIENCE

HOPKINTON, MA -- EMC Corporation (NYSE:EMC) today reported financial results for the second quarter of 2001, reflecting the extension of its leadership position in the most advanced and fastest-growing areas of the information storage market despite the extremely difficult economic conditions facing many of its customers around the world. Total consolidated revenue for the second quarter was $2.02 billion, 6% lower than the $2.15 billion recorded in the second quarter of 2000. Net income for the quarter was $109 million, compared with $429 million in the second quarter of 2000. On a diluted basis, earnings per share were $0.05 in the quarter, including a charge of approximately $.01 per share to cover the cost of staff reductions, compared with $0.19 in the second quarter of 2000. Information storage revenue (which represented 97% of EMC's total consolidated revenue in the second quarter) was $1.96 billion, 2% lower than the $2 billion recorded in the second quarter of 2000. Software revenue grew 42% over the year-ago quarter to $498 million, achieving its most successful quarter ever and representing 25% of EMC's total consolidated revenue. Revenue from networked information storage grew 56% over the year-ago quarter to $714 million, as customers continued to choose EMC solutions for their leading-edge SAN (storage area network) and NAS (network-attached storage) deployments. Revenue from information storage services grew 73% compared with the year-ago quarter to $232 million, reflecting the expansion of EMC Professional Services as a major factor in helping customers design, deploy and manage their networked information infrastructures. Mike Ruettgers, EMC Executive Chairman, said, "The global economic environment has become much tougher. I cannot recall a more difficult environment in terms of technology spending than the one that has unfolded over the past few months. It is now expected that IT spending may shrink on a year-to-year basis for the first time in decades. More than 800 companies have made pre-announcements that the spring quarter would be below expectations. By and large, these are our customers. We are working with them to build information infrastructures that deliver the highest value and greatest business impact over both the short and long term." Joe Tucci, EMC President and CEO, said, "Weakness in capital spending is taking a big bite out of IT budgets in a number of industries around the world. Delayed purchases and cancelled projects were the largest factors preventing us from hitting our revenue goals for the second quarter, and the revenue shortfall led directly to lower margins. As expected, EMC's strongest growth is coming from the areas that deliver the greatest impact to customers: networked information storage and information storage software. The growth drivers we identified at the beginning of the year are bearing fruit, and they represent the brightest future for EMC." Tucci continued, "In times of economic difficulty and reduced visibility, leaders have both the opportunity and the responsibility to continue investing to advance their leadership and to take great care of their customers. We are doing exactly that. We will continue to invest in R&D at levels that will increase our technology lead and in the sales and services resources needed to grow market share and maintain our industry-leading customer satisfaction levels, while continuing to attack unnecessary costs. Our strategy is aimed squarely at long-term profitable growth and market leadership. When the fog lifts, EMC's technological stature and market leadership will be stronger than ever." For additional information visit www.emc.com