Stock Analysis on Net
Stock Analysis on Net

EMC Corp. (NYSE:EMC)

$22.49

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

Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

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EMC Corp., consolidated income statement

US$ in millions

Microsoft Excel
12 months ended: Dec 31, 2015 Dec 31, 2014 Dec 31, 2013 Dec 31, 2012 Dec 31, 2011
Product sales
Services
Revenues
Cost of product sales
Cost of services
Cost of revenues
Gross profit
Research and development
Selling, general and administrative
Restructuring and acquisition-related charges
Operating income
Investment income
Interest expense
Other income (expense), net
Non-operating income (expense)
Income before provision for income taxes
Income tax provision
Net income
Net income attributable to the non-controlling interests
Net income attributable to EMC Corporation

Based on: 10-K (reporting date: 2015-12-31), 10-K (reporting date: 2014-12-31), 10-K (reporting date: 2013-12-31), 10-K (reporting date: 2012-12-31), 10-K (reporting date: 2011-12-31).

Revenue Trends
Revenues showed a steady increase from US$ 20.0 billion in 2011 to US$ 24.7 billion in 2015. Product sales increased from US$ 12.6 billion in 2011 to a peak of US$ 14.1 billion in 2014 but declined slightly to US$ 13.5 billion in 2015. Meanwhile, services continually grew each year from US$ 7.4 billion in 2011 to US$ 11.2 billion in 2015, indicating a progressive shift or expansion in service offerings.
Cost Analysis
The cost of product sales increased gradually from US$ 5.3 billion to US$ 5.8 billion over the five years, with a relatively stable upward trend. The cost of services rose more substantially, from US$ 2.5 billion in 2011 to nearly US$ 3.9 billion in 2015, reflecting the significant growth in service revenues. Consequently, total cost of revenues increased from US$ 7.8 billion in 2011 to US$ 9.7 billion in 2015, representing the company’s rising expenditure to support revenue growth.
Profitability
Gross profit exhibited growth from US$ 12.2 billion in 2011 to US$ 15.2 billion in 2014, followed by a slight drop to US$ 15.0 billion in 2015. This mirrors the revenue pattern, with the decline likely related to the reduction in product sales. Operating income increased from US$ 3.4 billion in 2011 to a peak of US$ 4.2 billion in 2013, then declined sharply to US$ 2.8 billion by 2015. This decline in operating income during 2014-2015 coincides with increased restructuring and acquisition-related charges, which nearly quintupled to US$ 450 million in 2015, and rising selling, general, and administrative expenses.
Expenses
Research and development expenses steadily increased from US$ 2.2 billion in 2011 to US$ 3.2 billion in 2015, indicating continuous investment in innovation. Selling, general, and administrative expenses rose consistently from US$ 6.5 billion to US$ 8.5 billion over the same period, suggesting expanding operational costs. The significant increase in restructuring and acquisition-related charges between 2013 and 2015 signals notable corporate restructuring or acquisition activities impacting income.
Non-operating and Other Income
Investment income remained relatively stable around US$ 100-130 million yearly, while interest expense fluctuated without a clear trend, indicating variable debt servicing costs. Other income (expense), net, improved markedly in 2015, moving from consistent negative amounts to a positive US$ 111 million, which contributed to a positive total non-operating income of US$ 41 million in 2015, after several years of negative figures.
Net Income and Taxation
Net income increased from US$ 2.6 billion in 2011 to a high of US$ 3.1 billion in 2013, then declined to US$ 2.2 billion in 2015. The net income attributable to the corporation followed a similar pattern. Income tax provision fluctuated but exhibited a general increase until 2012 before declining towards 2015. The decline in net income after 2013 reflects the combined effects of higher expenses, increased charges, and a reduction in operating income, despite relatively stable tax rates.
Summary
Overall, the data reflects growth in total revenues driven primarily by expanding services, with product sales stabilizing and slightly declining in the last year. Costs and expenses grew consistently, particularly within services and administrative functions. Although gross profit remained robust, increased restructuring charges and rising operational costs exerted downward pressure on operating income and net income starting in 2014. The company appears to be investing heavily in research and development and undergoing structural changes impacting profitability. The positive shift in non-operating income in 2015 helped partially offset these challenges, but net income still experienced a notable decline.