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EMC Corp. (NYSE:EMC)

This company has been moved to the archive! The financial data has not been updated since August 8, 2016.

Common-Size Income Statement
Quarterly Data

EMC Corp., common-size consolidated income statement (quarterly data)

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3 months ended: Jun 30, 2016 Mar 31, 2016 Dec 31, 2015 Sep 30, 2015 Jun 30, 2015 Mar 31, 2015 Dec 31, 2014 Sep 30, 2014 Jun 30, 2014 Mar 31, 2014 Dec 31, 2013 Sep 30, 2013 Jun 30, 2013 Mar 31, 2013 Dec 31, 2012 Sep 30, 2012 Jun 30, 2012 Mar 31, 2012 Dec 31, 2011 Sep 30, 2011 Jun 30, 2011 Mar 31, 2011
Product sales 52.53 48.99 58.66 53.78 53.78 51.75 61.34 56.37 56.45 54.90 62.19 57.14 58.03 57.76 61.83 58.44 59.85 60.24 63.52 61.73 62.82 63.62
Services 47.47 51.01 41.34 46.22 46.22 48.25 38.66 43.63 43.55 45.10 37.81 42.86 41.97 42.24 38.17 41.56 40.15 39.76 36.48 38.27 37.18 36.38
Revenues 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
Cost of product sales -21.72 -22.85 -23.78 -22.68 -23.90 -23.68 -23.69 -23.21 -23.33 -23.65 -24.40 -23.90 -23.87 -25.17 -23.38 -24.49 -23.62 -25.55 -25.16 -25.49 -27.39 -28.66
Cost of services -16.19 -17.61 -14.07 -16.37 -16.29 -16.84 -12.40 -14.74 -14.52 -15.26 -12.38 -13.96 -13.63 -13.62 -12.11 -13.22 -13.36 -13.34 -11.63 -12.94 -13.16 -12.76
Cost of revenues -37.91% -40.46% -37.85% -39.05% -40.19% -40.51% -36.09% -37.95% -37.86% -38.91% -36.78% -37.86% -37.50% -38.79% -35.49% -37.71% -36.98% -38.89% -36.79% -38.43% -40.56% -41.42%
Gross profit 62.09% 59.54% 62.15% 60.95% 59.81% 59.49% 63.91% 62.05% 62.14% 61.09% 63.22% 62.14% 62.50% 61.21% 64.51% 62.29% 63.02% 61.11% 63.21% 61.57% 59.44% 58.58%
Research and development -13.64 -14.87 -11.33 -13.19 -13.04 -14.04 -10.68 -12.72 -12.59 -13.34 -10.54 -12.38 -12.38 -12.54 -10.99 -12.37 -12.35 -11.54 -10.06 -11.00 -11.12 -10.90
Selling, general and administrative -33.80 -36.29 -32.06 -35.29 -35.05 -36.29 -30.22 -32.99 -34.18 -33.80 -30.38 -32.66 -31.80 -31.81 -31.98 -32.37 -32.32 -32.39 -32.20 -32.39 -32.52 -32.47
Restructuring and acquisition-related charges 0.02 -0.89 -3.19 -1.12 -0.38 -2.41 -0.72 -0.65 -0.51 -2.17 -0.44 -0.72 -0.12 -2.74 -0.50 -0.51 -0.52 -0.51 -0.52 -0.41 -0.44 -0.58
Operating income 14.66% 7.49% 15.57% 11.35% 11.34% 6.75% 22.29% 15.70% 14.86% 11.77% 21.86% 16.37% 18.20% 14.12% 21.04% 17.03% 17.83% 16.67% 20.43% 17.77% 15.37% 14.63%
Investment income 0.43 0.24 0.27 0.41 0.43 0.43 0.33 0.48 0.60 0.66 0.52 0.47 0.61 0.62 0.49 0.57 0.49 0.58 0.41 0.65 0.74 0.83
Interest expense -0.70 -0.75 -0.60 -0.67 -0.68 -0.71 -0.55 -0.66 -0.58 -0.62 -0.69 -1.05 -0.55 -0.39 -0.34 -0.41 -0.35 -0.36 -0.62 -0.89 -0.96 -0.98
Other income (expense), net -0.23 0.07 0.78 0.36 0.40 0.18 -0.09 -1.71 -1.12 -1.39 -0.91 -0.99 -1.05 -1.52 -0.64 -1.19 -0.96 -0.86 -1.42 -1.20 0.63 -0.94
Non-operating income (expense) -0.50% -0.44% 0.46% 0.10% 0.15% -0.11% -0.31% -1.89% -1.11% -1.35% -1.08% -1.57% -1.00% -1.29% -0.49% -1.04% -0.82% -0.64% -1.64% -1.44% 0.41% -1.08%
Income before provision for income taxes 14.16% 7.05% 16.02% 11.45% 11.49% 6.65% 21.97% 13.81% 13.76% 10.42% 20.77% 14.80% 17.21% 12.83% 20.55% 15.99% 17.01% 16.04% 18.79% 16.33% 15.78% 13.55%
Income tax provision -3.69 -1.63 -4.13 -2.76 -2.83 -1.46 -4.77 -3.42 -3.18 -2.54 -4.47 -3.27 -3.85 -1.41 -5.42 -3.51 -4.03 -3.75 -3.14 -3.44 -3.56 -2.64
Net income 10.47% 5.42% 11.89% 8.69% 8.65% 5.18% 17.21% 10.39% 10.58% 7.88% 16.30% 11.54% 13.36% 11.41% 15.12% 12.48% 12.98% 12.29% 15.65% 12.89% 12.21% 10.91%
Net income attributable to the non-controlling interests -0.81 -0.53 -0.90 -0.79 -0.53 -0.69 -0.95 -0.66 -0.56 -0.73 -1.00 -0.96 -0.87 -0.65 -0.70 -0.61 -0.75 -0.77 -0.73 -0.73 -0.93 -0.55
Net income attributable to EMC Corporation 9.66% 4.89% 10.99% 7.90% 8.12% 4.49% 16.26% 9.73% 10.02% 7.15% 15.29% 10.58% 12.49% 10.77% 14.43% 11.87% 12.23% 11.52% 14.93% 12.16% 11.28% 10.36%

Based on: 10-Q (reporting date: 2016-06-30), 10-Q (reporting date: 2016-03-31), 10-K (reporting date: 2015-12-31), 10-Q (reporting date: 2015-09-30), 10-Q (reporting date: 2015-06-30), 10-Q (reporting date: 2015-03-31), 10-K (reporting date: 2014-12-31), 10-Q (reporting date: 2014-09-30), 10-Q (reporting date: 2014-06-30), 10-Q (reporting date: 2014-03-31), 10-K (reporting date: 2013-12-31), 10-Q (reporting date: 2013-09-30), 10-Q (reporting date: 2013-06-30), 10-Q (reporting date: 2013-03-31), 10-K (reporting date: 2012-12-31), 10-Q (reporting date: 2012-09-30), 10-Q (reporting date: 2012-06-30), 10-Q (reporting date: 2012-03-31), 10-K (reporting date: 2011-12-31), 10-Q (reporting date: 2011-09-30), 10-Q (reporting date: 2011-06-30), 10-Q (reporting date: 2011-03-31).

The common-size income statement analysis reveals a structural shift in the revenue model and periodic volatility in profitability between March 2011 and June 2016. A primary trend is the transition from product-led revenue to a more balanced mix with an increasing reliance on services.

Revenue Composition and Mix
A consistent decline in the proportion of revenues derived from product sales is observed, falling from 63.62% in March 2011 to 52.53% by June 2016. Conversely, services revenue as a percentage of total revenues increased from 36.38% to 47.47% over the same period. This indicates a strategic pivot toward recurring service-based income, although product sales continue to show strong seasonality with peaks typically occurring in the December quarters.
Gross Profitability and Cost Structure
Gross profit margins remained relatively resilient, generally fluctuating between 59% and 64%. The cost of product sales showed a gradual downward trend, improving from 28.66% of revenues in March 2011 to 21.72% in June 2016. This efficiency gain was partially offset by an increase in the cost of services, which rose from 12.76% to 16.19% of revenues, reflecting the higher resource requirements associated with the expanding services portfolio.
Operating Expense Trends
Research and development (R&D) expenses increased as a percentage of revenues, rising from approximately 11% in 2011 to peaks of nearly 15% in early 2016, suggesting increased investment in innovation. Selling, general, and administrative (SG&A) expenses remained largely stable around 32% for several years but experienced a notable increase to 36.29% in March 2015. Restructuring and acquisition-related charges occurred sporadically, with significant spikes observed in March 2013, March 2014, and December 2015.
Operating and Net Income Performance
Operating income exhibited significant volatility and a strong seasonal pattern, often peaking in the fourth quarter. A sharp contraction in operating margins occurred in early 2015, reaching a low of 6.75% in March 2015, before recovering to 14.66% by June 2016. Net income attributable to the company followed a similar trajectory, with a peak of 16.26% in December 2014 and a trough of 4.89% in March 2016.
Non-Operating Items and Tax Impact
Investment income showed a general decline from 0.83% to 0.43% of revenues. Interest expenses remained consistently low, generally staying below 1% of total revenues. The income tax provision as a percentage of revenues fluctuated significantly, with the most substantial impact seen in December 2012 at 5.42%.

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