Ahead of the Bell: VMware shares fall on outlook
NEW YORK (AP) — Shares of VMware Inc. fell 19 percent just before trading opened on Tuesday after the software company's outlook disappointed.
In a sign of its difficulties, the company also said as it reported its results Monday that it's cutting 900 jobs, or nearly 7 percent of its workforce, and plans to exit some businesses.
VMware's virtualization software allows one computer to function as multiple machines, which can help companies save energy and other costs.
"Customers are simply spending less," said Sterne Agee analysts Alex Kurtz and Amelia Harris in a Tuesday research note. They cut their rating on VMware to "Neutral" from "Buy."
VMware expects revenue of $1.17 billion to $1.19 billion for the first quarter. Analysts polled by research firm FactSet had forecast revenue of $1.25 billion.
VMware shares fell $18.37 to $79.95 in trading before the market opened Tuesday. That's near the 52-week low of $79.46 they reached in July.