EMC Corp, the world's top maker of corporate data storage equipment, on Wednesday said quarterly profit nearly doubled, helped by a tax-related benefit and strength in its services business.
The company, whose shares were up 2.3 percent, said third-quarter net income rose to $422 million, or 17 cents per share, from $218 million, or 9 cents per share, a year earlier.
Excluding a tax-related benefit of $106 million, earnings per share were 13 cents, a penny better than the average forecast among analysts polled by Reuters Estimates.
EMC, whose data storage machines have become increasingly interchangeable with those of its competitors, has found growth and higher margins in the lucrative business of helping companies manage tremendous increases in data storage needs. Revenue in its services business grew 25 percent in the third quarter to $402.1 million.
"The services business is good for their margins," said Brian Freed, an analyst with Morgan Keegan and Co.
"Additionally, I think it's a good indicator of what future interest is because it is professional services that lead product deployments - it's a good proxy on future demand."
EMC Chief Financial Officer Bill Teuber said the company was aiming for full-year earnings of 53 cents a share, up 2 cents from its July forecast.
EMC, based in Hopkinton, Massachusetts, forecast fourth-quarter sales of $2.67 billion to $2.69 billion, and earnings per share of 16 cents to 17 cents, in line with analysts' expectations.
The market for storage systems remains competitive, Chief Executive Joe Tucci said on a conference call with analysts.
EMC's sales rose 17 percent in the third quarter to $2.37 billion, within the range of analysts' estimates, boosted by services sales growth. The company said it significantly stepped up its stock buybacks in the third quarter, spending $333 million on more than 24 million shares.