EMC Earnings Approach

S&P 500 (NYSE:SPY) component EMC (NYSE:EMC) will unveil its latest earnings on Wednesday, October 24, 2012. EMC and its subsidiaries deliver and support a range of information infrastructure technologies and solutions.

EMC Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 34 cents per share, a rise of 9.7% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 35 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 34 cents during the last month. Analysts are projecting profit to rise by 13.6% compared to last year’s $1.42.

Past Earnings Performance: Last quarter, the company missed estimates by one cent, coming in at net income of 32 cents per share versus a mean estimate of profit of 33 cents per share. In the first quarter, the company beat estimates by 2 cents.

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A Look Back: In the second quarter, profit rose 18.9% to $649.5 million (29 cents a share) from $546.5 million (24 cents a share) the year earlier, but fell short analyst expectations. Revenue rose 9.6% to $5.31 billion from $4.85 billion.

Wall St. Revenue Expectations: Analysts are projecting a rise of 9.6% in revenue from the year-earlier quarter to $5.46 billion.

Stock Price Performance: Between September 20, 2012 and October 18, 2012, the stock price dropped $2.52 (-9.2%), from $27.52 to $25. The stock price saw one of its best stretches over the last year between January 17, 2012 and January 25, 2012, when shares rose for seven straight days, increasing 15.6% (+$3.47) over that span. It saw one of its worst periods between November 15, 2011 and November 25, 2011 when shares fell for eight straight days, dropping 10.9% (-$2.67) over that span.

Key Stats:

After experiencing income increases the last three quarters, the company is hoping to keep the good news coming with this earnings announcement. Net income rose 32.4% in the fourth quarter of the last fiscal year and 23% in the first quarter before increasing again in the second quarter.

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 18.2% in the third quarter of the last fiscal year, 14% in the fourth quarter of the last fiscal year and 10.6% in the first quarter before increasing again in the second quarter.

Analyst Ratings: With 29 analysts rating the stock a buy, none rating it a sell and two rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.19 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term. The company regressed in this liquidity measure from 1.27 in the first quarter to the last quarter driven in part by an increase in liabilities. Current liabilities increased 3.4% to $9.19 billion while assets decreased 3.2% to $10.93 billion.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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