VMware Turns In Mixed-Bag Earnings Report
VMware on April 23 revealed a mixed bag in its first-quarter 2013 quarterly earnings report: revenue numbers that increased, services income that remained strong—and profits that were 9.3 percent lower than a year ago.
The world's largest virtualization software and services provider reported a profit of $173.6 million, or 40 cents a share, down from $191.4 million (44 cents a share) a year ago. Wall Street analysts had forecast earnings of 70 cents per share.
Revenue increased a healthy 13 percent to $1.19 billion. VMware had projected revenue between $1.17 billion and $1.19 billion during the Q4 2012 report in January; those came in below analyst estimates at the time.
Revenue from consulting, support and subscription software services was a key growth component, increasing by 23 percent. Software licensing revenue moved up modestly at 1.3 percent.
The stock price fell about 8 percent to $70 in after-hours trading. The stock has fallen 20 percent since the beginning of the calendar year.
In guidance to shareholders and analysts, VMware trimmed its full-year revenue estimate to between $5.12 billion to $5.24 billion. This was down from the company's first projection of $5.23 billion to $5.35 billion in January.
The Palo Alto, Calif.-based company, owned by EMC, revealed earlier this year that it is in the process of trimming about 900 jobs, reflecting lessened emphasis on parts of its business. The company also is dealing with slowing growth in its core server virtualization business and only so-so results from its virtualized desktop initiatives.
VMware has previously warned financial analysts that new business in its sector isn't expected to regain momentum until the second half of the year.