EMC Rises 4% on Q2 Beat, Forecast Above Estimates

Shares of storage equipment vendor EMC (EMC) are on the march this afternoon, rising 59 cents, or 4%, at $15.00, after the company this morning reported Q2 sales fell 11.3%, year over year, to $3.26 billion, a hair above the consensus $3.2 billion estimate, and profit per share came in at 18 cents, a penny better than estimates.

EMC’s outlook was also higher than expected, with EPS, excluding some costs, projected to be 82 cents, above the average 78-cent estimate. Moreover, the results of the company’s announced acquisition of Data Domain (DDUP) are now being included in the forecast, which goes to $13.8 billion for all of this year, ahead of the Street $13.5 billion.

EMC had $400 million of free cash flow in the quarter, boosting its cash and equivalents to $7.26 billion, up from $6.81 a year earlier.

The results were helped by $455 million in sales from VMWare (VMW), in which EMC has a financial stake. VMWare reported Q2 results yesterday evening that narrowly exceeded estimates.

“This marks another quarter of solid execution, and I am proud of the EMC and VMware teams around the world that produced these results,” said EMC chairman and CEO Joe Tucci.

Follwoing the release, R.W. Baird & Co. analyst Jayson Noland reiterated his “Outperform” rating on the stock and raised his price target to $18 from $14. Noland was pleased with management remarks this morning that indicate its customers are increasing their confidence, and that there is a strong Q4 revenue ramp building, in his view. Noland increased his revenue and EPS forecasts for 2010 to $14.4 billion and $1.04 from $14.2 billion and $1.

Kudos to Merriman, Curhan Ford analyst Alex Kurtz and Lazard Capital Markets analyst Ryan Hutchinson, both of whom initiated on the stock with “Buy” ratings, Hutchinson on Monday, Kurtz, yesterday.