|VMware Rising on Q3 Earnings Beat, Raises Full-Year View |
By Tiernan Ray
October 26, 2016, 4:56 P.M. ET
Shares of virtualization software pioneer VMware ( VMW) are up $1.44, or 2%, at $74.75, after the company this afternoon reported Q3 revenue and profit that topped analysts’ expectations.
Revenue in the three months ended in September rose 6%, year over year, to $1.78 billion, yielding EPS of $1.14, excluding some costs.
Analysts had, on average, been modeling $1.76 billion in revenue and $1.10 per share.
License revenue was up 1%, year over year, at $691 million.
CFO Zane Rowe said the company was “pleased with our Q3 financial performance, which exceeded the midpoint of our revenue and operating margin guidance” adding that the company “continue to broaden our portfolio with a range of products that will drive growth for the company.”
VMware said it formed a new business unit today, “Products and Cloud Services,” that will “extend VMware’s leadership across compute, storage, networking, management and business mobility,” to be run by Raghu Raghuram and Rajiv Ramaswami, and the duo will jointly take the title Chief Operating Officers, Products and Cloud Services.
Among other personnel shifts,
Sanjay Poonen is also taking on an expanded role as Chief Operating Officer, Customer Operations responsible for Worldwide Sales and Services, Channels, Marketing, and Global Communications. With these changes, Sumit Dhawan has been promoted to General Manager and Senior Vice President, End-User Computing, replacing Poonen in that role and Jeff Jennings has been promoted to Vice President and General Manager of the Networking and Security BU as Ramaswami moves into his COO role.
VMware management will host a conference call with analysts at 5pm, Eastern time, this evening, and you can catch a webcast of it on the company’s investor relations home page.
Update: On the call, VMware forecast results this quarter above expectations, and raised its year outlook.
The company sees revenue this quarter of $1.965 to $2.015 billion, and EPS of $1.37 to $1.41. That is better than consensus for $1.956 billion and $1.37 per share.
For the full year, the company now sees revenue of $7.025 billion to $7.075 billion, and EPS of $4.34 to $4.38 per share. That is up from the company’s prior forecast for $6.785 billion to $6.935 billion in revenue and $4.07 to $4.16 per share. It is also above consensus for $6.999 billion and $4.29 per share.
The stock is now up $2.49, or 3.4%, at $75.80.