(Bloomberg) -- EMC Corp. reported first quarter sales and profit that fell short of analysts’ estimates in a slowing market for storage devices, as the company nears a $67 billion takeover by Dell Inc.
First-quarter profit excluding certain items was 31 cents a share, EMC said in a filing Wednesday. Revenue was little changed from a year earlier at $5.48 billion. Analysts on average had projected profit of 33 cents and sales of $5.63 billion, according to data compiled by Bloomberg.
EMC’s older and pricier storage devices are facing slowing demand and newer models using flash technology aren’t growing rapidly enough to make up lost ground.
As the largest data storage maker, Hopkinton, Massachusetts-based EMC is also being hurt as more customers opt to rent space from cloud vendors like Amazon.com Inc. and Microsoft Corp. rather than buy their own gear from companies like EMC.
"The core storage business is moving to the cloud at an accelerated pace and that’s a net negative for the company," said Abhey Lamba, an analyst at Mizuho Securities USA Inc. "Flash is doing well for EMC but a lot of that is cannibalizing their own legacy systems."
Dell’s planned purchase, the biggest technology acquisition ever, will combine EMC’s dominance in storage devices with closely held Dell’s No. 2 position in servers, the powerful machines that run corporate computing.
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