VMware Sales Paced by Services Segment
October 26 2016 - 6:30PM
Dow Jones News
VMware Inc. posted better-than-expected adjusted earnings and
revenue, boosted by its services business, as the virtualization
software vendor prepares to shift reporting periods following the
merger between parent EMC Corp. and Dell Inc.
The $60 billion deal, announced October 2015, took nearly 11
months to complete. Dell and its partner, investment firm Silver
Lake, raised more than $40 billion in debt.
Dell, which is privately held, purchased not only EMC but its
Byzantine federation of wholly and partially owned subsidiaries.
Those include cybersecurity firm RSA Security LLC,
software-development company Pivotal Software Inc., cloud-software
company Virtustream and VMware, which will remain public.
VMware will transition to the Dell fiscal year beginning Feb. 4.
As a result, the company's first quarter will end May 5.
VMware also announced the formation of a new organization
focused on products and cloud services. Raghu Raghuram and Rajiv
Ramaswami will co-lead this new organization.
For the quarter, VMware earned $319 million, or 75 cents a
share, compared with $256 million, or 60 cents a share, a e year
earlier. Excluding certain items, adjusted per-share earnings were
$1.14, up from $1.02.
Sales rose 6.3% to $1.78 billion, paced by climbing sales in its
services business, up to $1.09 billion from $991 million a year
earlier. License revenue climbed to $691 million from $681
million.
Analysts had expected adjusted earnings of $1.10 a share on
$1.76 billion in revenue.
Shares of the VMware, up nearly 23% for the year, were inactive
after hours.
Earlier in the year, the Palo Alto, Calif., company launched a
restructuring plan that aimed to cut as many as 800 positions. And
earlier this month, Amazon.com Inc.'s cloud-computing unit signed a
deal with VMware to offer companies the ability to run their
computing operations on both their own VMware-equipped data centers
and Amazon's web-based servers.
Write to Ezequiel Minaya at ezequiel.minaya@wsj.com
(END) Dow Jones Newswires
October 26, 2016 18:15 ET (22:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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