By Maria Armental
VMware Inc.'s fourth-quarter profit fell slightly, offsetting a
double-digit revenue increase, as the computer-server software
pioneer reported higher costs associated with its
stock-compensation program.
The fourth quarter is historically the company's strongest
quarter.
The Silicon Valley company--a pioneer in virtualization, a
technology that paved the way for cloud-computing, substituting
hardware with software and driving down IT costs--has been
expanding operations in the booming mobile-device market.
VMware is majority-owned by data-storage vendor EMC Corp., which
has been under pressure by hedge-fund manager Elliott Management
Corp. to shake-up operations, including the spinning off of VMware.
EMC this month added two members to its board as part an agreement
with Elliott.
The company said its board has authorized buying up to $1
billion worth of shares through the end of 2017 and said the stock
repurchase authorization, which adds to the $1 billion approved in
August, should "more than offset dilution from its equity
compensation programs in 2015."
For the most recent period, VMware reported a profit of $326
million, or 75 cents a share, compared with $335 million, or 77
cents, a year earlier. Excluding stock-based compensation and other
items, profit rose to $1.08 a share from $1.01 a year earlier.
Revenue rose 15% to $1.7 billion.
VMware said in August it would no longer offer long-term
financial projections.
Shares rose 3.49% to $83.42 in recent after-hours trading.
Through Tuesday's closing, the company's stock was down 13% over
the past 12 months.
Write to Maria Armental at maria.armental@wsj.com
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