EMC Is Ready to Meet With Activists, Meets Street View
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EMC CEO Joe Tucci says he’s willing to meet with representatives of an activist investor fund that wants to break up the company.
Speaking on a conference call with investors, Tucci said the company hasn’t formally heard from the activist hedge fund that disclosed a two percent stake in the company earlier this week.
“We have not heard from Elliott Management, other than their call to us stating that they are or intend to be one of EMC’s larger investors,” Tucci said. “They also requested a meeting with me, and I have agreed to meet with them as I periodically do with all of our large investors.”
Tucci went on to say that he’s “always open” to a dialogue with shareholders and would “respectfully listen to their ideas and beliefs.”
His comments on Elliott Management followed a robust defense of the unique corporate structure that Tucci has assembled, with the storage company EMC at the center of multi-spoked tech conglomerate including the software company VMware, the software development company Pivotal and the computer security company RSA.
Perhaps telegraphing an anticipated proxy fight, Tucci said he and other executives have met recently with more than 100 shareholders; hinting at his confidence in their support, he said: “What we heard has resonated with us: You said, ‘We understand and like EMC’s strategy and strategic position.’ You said, ‘We believe there is a strong leadership team across the EMC companies and they have a strong ability to execute.'”
His comments came after EMC, which sells storage systems to large companies, reported results that were more or less in line with the expectations of analysts. Earnings per share for the second quarter were 43 cents, meeting the consensus view, on revenue of $5.9 billion, which was slightly better than expected. Sales rose five percent year on year. Net profits fell by three percent, though they were roughly flat on a per-share basis.
The company boosted its guidance for the full year, saying it expects to make $1.91 a share, a penny higher than the consensus, on $24.6 billion in sales this year with operating income of about 24 percent. It also accelerated an existing share-buyback program, saying it will buy back $3 billion worth of shares this year. It previously said it would complete these buybacks in 2015.
EMC shares rose by 30 cents to $28.82, more than one percent, as markets opened for trading in New York.