VMware Q2 Profit Down 32%, But Results Beat View
(dpa-AFX International Compact Via Acquire Media NewsEdge) WASHINGTON (dpa-AFX) - Virtualization software maker VMware Inc. (VMW) on Tuesday reported a 32 percent decline in profit for the second quarter from last year, as costs related to the company's acquisition of AirWatch more than offset double-digit growth in revenue. However, results for the quarter beat analysts' expectations.
Palo Alto, California-based VMware's net income for the second quarter was $167 million or $0.38 per share, down from $245 million or $0.57 per share in the same period last year.
The latest quarter's results reflect the impact of the acquisition of privately-held AirWatch, completed in the first quarter of 2014. In January 2014, VMware agreed to acquire mobile security and enterprise mobility management provider in a transaction valued at $1.54 billion.
Adjusted net income for the quarter was $351 million or $0.81 per share, compared to $343 million or $0.79 per share in the year-ago period. On average, 39 analysts polled by Thomson Reuters expected the company to report earnings of $0.79 per share for the quarter. Analysts' estimates typically exclude special items.
VMware's revenues for the quarter grew 17 percent to $1.46 billion from $1.24 billion in the prior-year period. Analysts had a consensus revenue estimate of $1.44 billion for the quarter.
License revenue increased 16 percent from the year-ago period to $614 million, while services revenue grew 18 percent to $843 million.
However, operating income for the quarter declined 26 percent from last year to $200 million, reflecting the impact of the AirWatch acquisition.
Looking ahead to the third quarter, VMware forecasts revenue growth of 15 percent to 18 percent to a range of $1.48 billion to $1.52 billion. For fiscal 2014, the company projects revenue to increase 14.5 percent to 17 percent to a range of $5.96 to $6.08 billion.
Street expects the company to report revenue of $1.50 billion for the third quarter and $6.02 billion for the full-year.
VMW closed Tuesday's trading at $96.03, up $3.08 or 3.31 percent on a volume of 3.48 million shares. In after-hours, the stock further gained $0.47 or 0.49 percent to $96.50.
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