Bloomberg News

VMware Profit Tops Estimates as Customers Add Server Software

January 24, 2012

Jan. 23 (Bloomberg) -- VMware Inc., the biggest maker of software that lets computers run multiple operating systems, reported sales and profit that topped analysts’ estimates as corporations bought programs to make servers more efficient.

Excluding some costs, fourth-quarter profit was 62 cents a share, VMware said in a statement today. That topped the 60-cent average estimate of analysts surveyed by Bloomberg. Sales rose 27 percent to $1.06 billion, above the $1.05 billion average prediction. First-quarter revenue will be $1.02 billion to $1.04 billion, compared with analyst projections for $1.02 billion.

VMware, based in Palo Alto, California, is benefiting from sales of new products, such as vSphere5 software, and contract renewals from large businesses, Adam Holt, an analyst at Morgan Stanley, wrote in a note today. Customers are investing in the company’s software as they seek to run more programs on a single computer and set up servers and storage devices to run corporate programs in the so-called cloud.

VMware, majority-owned by EMC Corp., jumped as much as 4.5 percent to $89.88 in extended trading after the report. Earlier, the stock declined 2.4 percent to $86 at the close in New York. The shares fell 6.4 percent last year.

Net income in the fourth quarter rose to $200.4 million, or 46 cents a share, from $119.9 million, or 28 cents, a year earlier, VMware said.

--Editors: Jillian Ward, Tom Giles

To contact the reporter on this story: Dina Bass in Seattle at dbass2@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net


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