VMware’s Current Quarter Revenue is Down
San Francisco, CA -- (SBWIRE) -- 11/13/2012 -- Although the software maker VMware Inc's (VMW.N) third-quarter profit beat estimates with strong sales to the U.S. government, its current-quarter revenue is largely below expectations.
According to Thomson Reuters I/B/E/S, VMware, which is the publicly traded division of storage giant EMC Corp (EMC.N), forecast fourth quarter revenue of $1.26 billion to $1.29 billion, compared with analysts' expectations of $1.28 billion. Overall, net profit fell this year compared to last, to $157 million, or 36 cents per share, from $178 million, or 41 cents per share. However, overall revenue increased by about 20 percent to $1.13 billion from $942 million.
The company is also undergoing some key executive changes; on Tuesday, VMware named Jonathan Chadwick as its new chief financial officer. Chadwick has previously served as Microsoft Corp's (MSFT.O) corporate vice president and as the CFO of Skype. As ISI Group analyst Brian Marshall notes, "The CFO has been a vacant position in the company for quite some time and its good to see a CFO hired with good solid industry experience.”
Most financial and industry analysts had forecast $1.13 billion in revenue and earnings of 63 cents per share. U.S. revenues grew 25 percent to $554 million from the year-ago quarter, the company said.Chief Operating Officer Carl Eschenbach explained during a conference call with analysts, "We had a solid third quarter with a slightly better than anticipated business with the U.S. federal government. . .the U.S. federal government bookings grew slightly year-over-year and finished higher than expected."
He also added, "Offset by challenges in some countries, particularly within the EMEA (Europe, Middle East & Africa) region and Australia, we remain cautious about the potential for slower IT spending as we exit 2012 and enter 2013.”
VMware, which competes with Oracle Corp (ORCL.O) and Salesforce.com Inc (CRM.N) in offering "cloud" computing services, is currently the world’s largest creator of the so-called virtualization software. In extended trade, shares of the Palo Alto, California-based company were up 2%. On this past Tuesday, it closed at $83.72 on the New York Stock Exchange.
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