Data storage equipment maker EMC cuts profit forecast

(Reuters) - EMC Corp, the world's largest maker of data storage equipment, cut its full-year earnings forecast, citing acquisition-related costs in its VMware Inc unit.

EMC's shares fell nearly 5 percent at open on the New York Stock Exchange on Wednesday.

VMware, in which EMC owns an 80 percent stake, said in January it would buy mobile security company AirWatch for $1.54 billion (918.03 million pounds).

EMC cut its full-year adjusted profit forecast to $1.90 per share from its prior forecast of $1.95. Analysts were expecting a profit of $1.94 per share.

VMware on Tuesday reported a better-than-expected first-quarter revenue but acknowledged a delay in closing some of its enterprise license agreements.

VMware shares fell as much as 11 percent in early trade.

EMC raised its full-year revenue forecast to $24.58 billion from $24.5 billion.

Analysts were expecting revenue of $24.51 billion, according to Thomson Reuters I/B/E/S.

EMC's revenue rose to $5.48 billion in the first quarter ended March 31, above the average analyst estimate of $5.43 billion.

Revenue in the company's information infrastructure business, which mainly supplies data storage equipment, fell 3 percent. The unit accounts for 74 percent of EMC's total revenue.

EMC and VMware last year announced a joint venture, Pivotal Inc, to cash in on growing demand for data analytics software.

EMC's net income fell to $392 million, or 19 cents per share, in the quarter from $580 million, or 26 cents per share, a year earlier.

Excluding items, the company earned 35 cents per share, meeting analysts' expectations, according to Thomson Reuters I/B/E/S.

The company also increased its quarterly cash dividend by 15 percent to 11.5 cents per share.

EMC's shares were down 4.6 percent at $25.56, while VMWare shares were down 8.69 percent at $96.02.

(Reporting by Soham Chatterjee; Additional rporting by Sruthi Ramakrishnan; Editing by Saumyadeb Chakrabarty; and Sriraj Kalluvila)