EMC, the world's largest maker of corporate data storage systems, this week forecast better-than-expected 2008 revenue but its shares fell after its VMware subsidiary missed Wall Street's growth estimates.

Shares of EMC fell almost 7 per cent on Tuesday, a day after its majority-owned business software maker, VMware, gave a disappointing earnings report and outlook.

EMC has had a manufacturing facility in Ireland since 1988 and employs more than 1,600 people between sites in Ovens, Co Cork and Dublin. Last year VMware opened a customer support centre in Cork which will ultimately employ 370 staff.

VMware's news dwarfed EMC's own stronger-than-expected fourth-quarter results and its forecast for 2008 revenue of $15 billion (€10.1 billion), which was above the average Wall Street projection of $14.7 billion.

The "strong fourth-quarter and 2008 revenue outlook [ were] probably neutralised by the VMware miss", said Goldman Sachs analyst David Bailey.

"Our view on EMC's stock would improve with more certainty that EMC will cleave off VMware in early 2009, a stance that EMC seems to be inching toward as its stock bears the brunt of VMware's miss."

EMC stock had jumped as much as 40 per cent after it sold a stake in VMware last August in one of the most-anticipated initial public offerings of a technology company since Google in 2004. Investors had viewed EMC as a relatively inexpensive alternative to owning VMware stock directly.

Shares of VMware, whose technology boosts the efficiency of servers by letting one machine perform the work of many, had quadrupled after the stake sale, but plunged this week after it reported quarterly revenue below analysts' expectations and forecast slower sales growth.

VMware said it expected revenue growth this year to slow to 50 per cent from 88 per cent in 2007.

"We are facing uncertain economic times," said EMC chief executive Joseph Tucci. "But EMC itself couldn't be better positioned."

EMC forecast 2008 generally accepted accounting principles (GAAP) earnings per share at 78 cents. It estimated revenue growth in its main data storage and security software businesses to slow to 9 per cent in 2008 from 14 per cent in 2007.

EMC's fourth-quarter net income rose to $525.7 million, or 24 cents a share, from $388.8 million, or 18 cents a share, a year earlier. Quarterly revenue rose 19 per cent to $3.8 billion.