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EMC sinks on 3Q earnings, outlook
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October 17, 2001: 12:07 p.m. ET
No. 1 data storage company blames competition, sets more job cuts.
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NEW YORK (CNNmoney) - Shares of EMC Corp. sank more than 11 percent after the data-storage systems maker reported a quarterly loss that was wider than expected and said it doesn't expect to log black ink on its bottom line until the second half of 2001.
Before the U.S. markets opened Wednesday, the world's largest supplier of data-storage systems reported a loss of $270 million, or 12 cents per share, for the third quarter. That excludes restructuring and other one-time charges and was more than twice the 5 cents per share analysts generally had expected the company to lose, according to a survey conducted by earnings tracker First Call.
Including an $825 million pretax charge for job cuts, excess inventory, plant closings and investment write-downs, EMC logged a third-quarter net loss of $945 million, or 43 cents per share, compared with net income of $458 million, or 20 cents per share, a year ago.
At $1.2 billion, EMC's third-quarter revenue fell more than 47.8 percent from $2.3 billion a year ago.
Besides facing a global downturn in information-technology spending, EMC is fending off stepped-up competition from rivals that are dropping prices on hardware and software.
In response to the deteriorating market conditions, EMC has been aggressively cutting its costs in an effort to return to profitability. The company said its cost-cutting efforts will yield savings of about $800 million annually by the middle of next year.
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At the same time, executives of EMC told analysts during a teleconference Wednesday that they do not expect the company to have a profitable quarter until the second half of next year.
"It is our expectation that we will be profitable in the second half of next year," said Bill Teuber, EMC's chief financial officer.
"We certainly could reach these levels sooner, but it depends on the economic environment and the actual revenue and margins achieved," Teuber added.
EMC executives did not provide any detailed earnings or revenue forecasts, saying macroeconomic forces made it difficult to give any precise estimates. 
-- from staff and wire reports
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