| From: Glenn Petersen | 1/26/2016 3:57:11 PM | | | | | | VMW reports after the close. A preview:
VMware Earnings Preview: Shareholders Uneasy Despite Expected Growth
Trefis Team, Contributor
Forbes
Jan 25, 2016 @ 01:56 PM
VMware is scheduled to announce its fourth quarter and full year earnings on Tuesday, January 26. At the beginning of Q4, tech giant Dell announced that it would acquire VMware’s majority owner EMC in a $67 billion acquisition. Dell management intended to keep VMware a publicly traded company, retaining an approximately 28% stake in VMware. VMware’s shareholders have reacted negatively to both the acquisition news, the introduction of a tracking stock related to VMware, and future plans by EMC that included a capital-intensive joint venture Virtustream with VMware. Consequently, VMware’s stock plummeted by about 30% through the quarter to about $55 by the end of December. Despite pressure from shareholders and investors, the company has continued to enhance its product offerings across end-user computing, mobility management and hybrid cloud domains.
We currently have a $86 price estimate for VMware’s stock, which is significantly higher than the current market price.
Is Dell/EMC Hindering VMware’s Growth?
Before Dell made the announcement, EMC had an 80% stake in VMware and 97% of voting rights. With Dell acquiring EMC, it has effectively taken the 97% voting rights but floated over 50% of VMware’s stock as tracking stock with no voting rights. Under the conditions of the deal, Dell would have a 28% stake in VMware with 97% voting rights, while existing VMware shareholders retain the 20% ownership with 3% voting rights, and over 50% ownership lies with former EMC shareholders in the form of tracking stock with no voting rights. Not only has the introduction of the tracking stock increased VMware’s float and depressed the valuation, shareholders are bound to be unhappy in a scenario where 97% of the voting rights lie with a party that has only a 28% economic interest in the company.
Network Virtualization, End-User Computing To Sustain Growth
VMware has seen a sustained period of strong customer response for the its software-defined networking platform NSX, its end-user computing product license sales and hybrid cloud computing offerings. The total number of paying customers for VMware’s NSX rose to over 900 by the end of Q3, up from 400 at the end of December and only about 150 at the end of June last year. Six out of VMware’s ten largest deals in Q3 included the NSX implementation, while the company also released the NSX 6.2 during the September quarter, which contributed significantly to the 100% annual rise in revenue generated through license bookings during the quarter.
The solid demand for NSX and software-defined networking likely continued through Q4, and is likely to continue to boost top line figures in the coming quarters. According to the company’s estimates, the number of production customers that are currently using NSX is far greater than the number of customers using similar products of any competing provider. Many of VMware’s customers continue to upgrade their networking and security requirements owing to the hardware-bound limitations in their current architectures. On the other hand, non-IT small and medium enterprises are likely to migrate to a newer technology once it fully matures. Accordingly, VMware could witness an increasing mix of large-scale license agreements and implementations in the coming years.
During the quarter, VMware announced the general availability of new hybrid networking capabilities including VMware Hybrid Cloud manager and Advanced Networking Services. Moreover, the company announced enhancements in the public cloud space for its Unified Hybrid Cloud platform at VMworld conference early in Q4. The product enhancement included the general availability for Google Cloud DNS and vCloud Air on a single platform and additional support for vSphere Integrated Containers on vCloud Air.
The other key area of growth for VMware has been end-user computing and mobile device management, which was boosted by the $1.5 billion Airwatch acquisition in January last year. The company has since witnessed strong demand for mobility solutions, as evidenced by 50-60% year-over-year growth in end-user computing license bookings through 2014 and in Q1’15. VMware witnessed a 30% year-over-year increase in license bookings for AirWatch in the June quarter, which further slowed to about 15% in Q3. The growth rate was lower in Q2 and Q3 mainly due to tougher year-over-year comparisons. The company has sustained growth in this domain and was recently recognized by IDC as a clear leader in enterprise mobility management domain.
Despite the massive drop in VMware’s market price through Q4, the company is likely to sustain growth for the quarter. The company expects Q4 revenues to be over $1.85 billion, which is a 9% year-over-year increase. Growth could be even higher in constant currency terms. VMware’s services revenue stream is likely to continue to witness a higher growth rate than the revenues generated through license bookings. The company has given guidance for license booking revenues to rise by 4-5% on a year-over-year basis to about $815 million, while services revenues could rise by over 10%.
forbes.com |
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| From: more100 | 1/27/2016 9:28:13 AM | | | | | | | VMWare (VMW) reported better than expected fourth quarter results but issued weak guidance for 2016. The company also announced a restructuring initiative that includes the elimination of 800 jobs. The company also said its CFO Jonathan Chadwick has decided to quit and Zane Rowe will assume the role on March 1st, 2016. |
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| From: more100 | 3/9/2016 3:27:27 AM | | | | | | | Both bearish candle and bearish CW suggest price in a trouble with a possible downside target $44 |
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| From: Glenn Petersen | 7/21/2016 4:36:38 PM | | | | | | VMware's Beat And Raise Ease Worries Over Management Changes
REINHARDT KRAUSE
IBD
7/19/2016
VMware ( VMW) stock jumped Tuesday as a beat-and-raise quarter eased worries over management changes, amid parent EMC's ( EMC) sale to privately held Dell.
EMC shareholders are meeting Tuesday to vote on Dell's $60 billion offer, and approval is expected.
VMware President Carl Eschenbach, CFO Jonathan Chadwick, and Martin Casado, a vice president, all recently left the company.
Late Monday, VMware reported Q2 earnings and sales that exceeded analysts' estimates, and it also raised its forecasts. VMware stock ended trading up 9.1% on the stock market today, at a nine-month high above 68.
"While it is logical to assume that all of the noise around VMW of late, including management departures and M&A-related concerns, will have a negative effect on the business, we believe that business is surprisingly resilient and that the company continues to sign deals," Jefferies analyst John DiFucci said in a research report.
VMware's virtualization software is widely used in corporate data centers. The software enables computer servers to run different operating systems and apps, increasing workloads and adding network flexibility. VMware aims to stay a leader in corporate computing as companies move to cloud-based technology -- sharing servers and data storage in remote data centers.
"While some skeptics may believe Q2's double-digit growth drained the pipeline, management sounded notably positive around the foundation the team has built for the back half of the year, which includes a big renewal opportunity and increasing contribution from the emerging product portfolio," UBS analyst Brent Thill said in a research report.
VMware said Q2 revenue rose 11% to $1.69 billion, while earnings minus items rose 4% to 97 cents per share. Analysts had modeled EPS of 95 cents on revenue of $1.68 billion.
For the current quarter, VMware forecasts EPS ex items of $1.10 on sales of about $1.76 billion, vs. consensus estimates of $1.05 and $1.72 billion.
investors.com |
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| To: JakeStraw who wrote (304) | 9/3/2016 9:43:06 AM | | From: Glenn Petersen | | | | The full article for those stymied by the Barron's paywall:
New Tracking Stock Offers Cheap Play on VMware
The VMware tracker to be issued by Dell next week as part of its EMC acquisition offers significant upside.
By Andrew Bary Biography
Barron's
August 31, 2016
VMWare CEO Patrick Gelsinger speaking at the 2015 Mobile World Congress Photo: Simon Dawson/Bloomberg
_______________________
The newly created tracking stock for VMware that will be issued by Dell as part of its $58 billion deal to buy EMC looks like a cheap way for investors to play VMware.
Shares of the tracking stock, Dell Technologies Class V (ticker: DVMTV), have been trading in the when-issued market for about two weeks and now changes hands at $44.68, roughly a 39% discount to VMware’s ( VMW ) common shares, now fetching $73.33. VMware is a software company best known for its virtualization products.
The VMware tracked shares are being issued to EMC holders as part of Dell’s cash-and-stock acquisition of EMC. Dell announced yesterday that the deal received Chinese regulatory approval, the last hurdle to the transaction, and will close on Wed. Sept. 7. The ticker on the tracker will change to DVMT after the deal closes. EMC holders will receive $24.05 in cash and 0.111 shares of the VMware tracker for each EMC share. EMC shares are fetching $28.99 today, unchanged on the day. Investors also can play the VMware tracker by purchasing EMC shares since they will get the tracker once the deal closes next week.
Dell offered the tracker as part of the consideration for the EMC deal in order to give EMC holders continued exposure to the company and reduce the cash outlay for the deal. EMC owns about 80% of VMware.
Tracking stocks, which are designed to reflect the economic performance of the underlying company, typically trade at some discount to the regular stock but the discount on the VMware tracker is unusually wide. Liberty Media’s tracking stock for SiriusXM Holding ( LSXMA) now trades at $33.51, an estimated 12% discount to Sirius stock (SIRI). Investors understandably prefer to directly own shares in a company rather than a tracker.
Barron’s wrote earlier this month that EMC was an attractive arbitrage situation because of the effective discount being applied to the VMware tracker. At that time, EMC traded at $28.20.
At a price of $44.68 on the tracker, investors effectively are purchasing VMware at just 10 times estimated 2016 earnings of about $4.30 a share, and that doesn’t reflect the company’s $16 a share in net cash.
Why such a steep discount on the tracker? The shares will be a class of Dell common stock and thus be exposed to the credit risk of Dell, which will be highly leveraged following its purchase of EMC. If Dell fails, the tracker could be wiped out. While Dell will be a junk-grade company following the EMC deal with estimated debt to annual cash flow of about six, it will have a sizable amount of annual cash flow and plans to deleverage. Another issue is that investors are wary about Dell CEO Michael Dell’s intentions. While Dell is bullish on VMware, it conceivably could let VMware languish under its control to repurchase the tracker stock or VMware itself more cheaply down the road.
One sizable EMC holder says he sees several reasons why the tracker discount to VMware could narrow. For starters, it’s rumored that some big institutional investors may be ready to purchase the tracker as an alternative to VMware once the deal closes.
The tracker apparently is more liquid than VMware and likely will get even more so once the deal closes. There will be about 223 million shares of the tracker outstanding, more than double the roughly 80 million shares of VMware. Dell will hold the remaining VMware stock, a roughly 28% stake. The higher liquidity in the tracker could narrow the discount.
While Dell is expected to focus initially on paying down debt, it could be a buyer of the tracking stock and indeed has stated publicly that it “may look for opportunities to repurchase shares” of the tracker, or Class V common.
What’s the upside in the tracker? If the tracker discount narrows to 25%, the shares would trade around $55 — about 23% above the current price — assuming no change in VMware.
A spinoff of Dell’s VMware stake to tracker holders in a one-for-one share swap isn’t likely for five years because of adverse tax consequences, according to New York tax expert Robert Willens. Such a move would collapse the tracker/VMware spread. Even without that event, tracker investors still could score if the discount narrows.
barrons.com |
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| From: Glenn Petersen | 10/13/2016 6:17:32 PM | | | | | | VMware’s new cloud service will run on AWS
by Frederic Lardinois ( @fredericl)
TechCrunch
October 13, 2016
It’s been an open secret that Amazon’s AWS division and VMware were going to announce a partnership at a press conference in San Francisco later today. Thanks to VMware mistakenly posting its announcement early, we didn’t have to wait for the afternoon to know what the two companies will announce.
In what is surely a play to get more enterprises to move to AWS over its competitors — and to protect VMware’s leadership around virtual machines, VMware and AWS are bringing VMware’s software-defined data center software to AWS under the ‘ VMware Cloud on AWS‘ moniker.
This means that all of VMware’s infrastructure software like vSphere, VSAN and NSX will soon run on AWS. The service is currently in its technology preview phase and an invite-only beta will start in early 2017 and the service will likely come out of beta in mid-2017.
The service will be operated, sold and supported by VMware (not AWS) but integrate with the rest of AWS’ cloud portfolio (think storage, database, analytics and more).
“Our customers continue to ask us to make it easier for them to run their existing data center investments alongside AWS,” wrote Andy Jassy, CEO, AWS, in today’s announcement. “Most enterprises are already virtualized using VMware, and now with VMware Cloud on AWS, for the first time, it will be easy for customers to operate a consistent and seamless hybrid IT environment using their existing VMware tools on AWS, and without having to purchase custom hardware, rewrite their applications, or modify their operating model.”
At their event today, the two companies introduced a number of early customers. These include Western Digital and Sysco.
The companies stress that this is a jointly architected service that “represents a significant investment in engineering, operations, support and sales resources from both companies.” It will run on a dedicated AWS infrastructure that was “purpose-built for this offering.” VMware CEO Pat Gelsinger also today stressed the fact that AWS and VMware worked very closely together to create this service and stressed that this will become VMware’ primary public cloud solution.
“Currently in Technology Preview, VMware Cloud on AWS, will bring VMware’s enterprise class Software-Defined Data Center software to the AWS cloud, and will enable customers to run any application across vSphere-based private, public and hybrid cloud environments,” VMware’s Mark Lohmeyer writes in today’s (currently deleted) announcement. “It will be operated, managed and sold by VMware as an on-demand, elastically scalable service and customers will be able to leverage AWS services such as developer tools, analytics, databases, and more.”
While Microsoft, IBM and others have strongly focused on the idea of the “hybrid cloud” (that is, a setup where an enterprise uses both its own data centers and public cloud services like Azure, Google Cloud or AWS), Amazon has mostly ignored this market.
Given that VMware already dominates in many of these enterprise’s own on-premises data centers but doesn’t own a public cloud service to give these users a hybrid option — and that AWS doesn’t offer an on-premises version of its services — it makes sense for these two companies to team up now.
VMware also stressed in its announcement the hybrid capabilities this partnership enables and notes that it will bring “full VM compatibility and total workload portability between the datacenter and the AWS cloud.”
It’s worth noting that AWS already offered some support for VMware’s vCenter for managing virtual machines. Thanks to this, vCenter admins have long been able to manage their AWS EC2 cloud computing instances using the same software they use for managing their VMware virtual machines. That service, too, made it relatively easy to move existing virtual machines to EC2.
As IBM kindly pointed out in a series of emails meant to preempt today’s announcement, VMware and IBM already teamed up and announced a partnership back in February. This deal with AWS seems to go quite a bit further, though.
techcrunch.com |
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| From: Glenn Petersen | 10/27/2016 9:38:50 AM | | | | | | VMware Rising on Q3 Earnings Beat, Raises Full-Year View
By Tiernan Ray
Barron's
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.
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| To: Glenn Petersen who wrote (307) | 11/24/2016 11:06:26 AM | | From: Puru rama | | | | VMware is one of the cheap stock to buy in 2017.At the list of cheap stocks at the bottom of this article, naturally. But there’s more to cheap stocks for 2017 than just a list of stock symbols.In fact, when it comes to rising earnings and revenue (something that has become a rarity on Wall Street), the technology sector is leading the way. With earnings season winding down, it’s clear to see that technology stocks are helping support the long-in-the-tooth bull market.
VMware, Inc.
Infinera Corp. |
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| To: Puru rama who wrote (308) | 4/28/2017 9:41:16 AM | | From: Glenn Petersen | | | | Zacks: Analysts Expect VMware, Inc. (VMW) to Announce $0.65 EPS)
April 18th, 2017
By Amy Steele
Brokerages expect VMware, Inc. (NYSE:VMW) to report $0.65 earnings per share (EPS) for the current fiscal quarter, Zacks Investent Research reports. Four analysts have provided estimates for VMware’s earnings. The lowest EPS estimate is $0.63 and the highest is $0.67. VMware reported earnings of $0.57 per share in the same quarter last year, which would indicate a positive year-over-year growth rate of 14%. The firm is scheduled to report its next quarterly earnings report on Monday, January 1st.
According to Zacks, analysts expect that VMware will report full-year earnings of $3.57 per share for the current financial year, with EPS estimates ranging from $3.48 to $3.66. For the next fiscal year, analysts anticipate that the firm will post earnings of $4.05 per share, with EPS estimates ranging from $3.96 to $4.26. Zacks Investment Research’s EPS averages are an average based on a survey of research analysts that cover VMware.
VMware (NYSE:VMW) last announced its quarterly earnings data on Thursday, January 26th. The virtualization software provider reported $1.43 EPS for the quarter, beating analysts’ consensus estimates of $1.40 by $0.03. VMware had a return on equity of 16.31% and a net margin of 16.72%. The company earned $2.03 billion during the quarter, compared to the consensus estimate of $1.99 billion. During the same quarter in the prior year, the firm earned $1.26 EPS. The company’s quarterly revenue was up 8.7% compared to the same quarter last year.
A number of research analysts have commented on VMW shares. Drexel Hamilton raised their price target on shares of VMware to $105.00 in a research note on Friday, January 27th. Oppenheimer Holdings Inc. set a $94.00 price target on shares of VMware and gave the stock a “buy” rating in a research note on Thursday, January 26th. Jefferies Group LLC raised their price target on shares of VMware from $91.00 to $105.00 and gave the stock a “buy” rating in a research note on Friday, January 27th. MKM Partners restated a “buy” rating and set a $100.00 price target (up previously from $84.00) on shares of VMware in a research note on Tuesday, January 31st. Finally, Zacks Investment Research upgraded shares of VMware from a “hold” rating to a “buy” rating and set a $103.00 price target for the company in a research note on Monday, April 3rd. One investment analyst has rated the stock with a sell rating, twenty-one have given a hold rating and eighteen have issued a buy rating to the company’s stock. VMware presently has a consensus rating of “Hold” and an average target price of $86.39.
Shares of VMware ( NYSE:VMW) traded up 0.39% during midday trading on Thursday, hitting $91.69. The stock had a trading volume of 1,337,287 shares. VMware has a 52 week low of $51.23 and a 52 week high of $93.05. The stock has a 50-day moving average of $91.07 and a 200 day moving average of $83.37. The stock has a market cap of $37.47 billion, a PE ratio of 33.01 and a beta of 0.97.
In other news, COO Sanjay Poonen sold 1,889 shares of VMware stock in a transaction on Monday, March 6th. The shares were sold at an average price of $89.04, for a total transaction of $168,196.56. Following the transaction, the chief operating officer now directly owns 182,569 shares of the company’s stock, valued at $16,255,943.76. The sale was disclosed in a legal filing with the SEC, which is available at the SEC website. Company insiders own 0.52% of the company’s stock.
A number of large investors have recently bought and sold shares of the stock. Dodge & Cox bought a new stake in VMware during the fourth quarter valued at approximately $745,926,000. Investec Asset Management LTD boosted its stake in VMware by 70.1% in the fourth quarter. Investec Asset Management LTD now owns 2,625,594 shares of the virtualization software provider’s stock valued at $206,713,000 after buying an additional 1,082,314 shares in the last quarter. BlackRock Institutional Trust Company N.A. boosted its stake in VMware by 2.0% in the third quarter. BlackRock Institutional Trust Company N.A. now owns 2,120,509 shares of the virtualization software provider’s stock valued at $155,539,000 after buying an additional 41,121 shares in the last quarter. DnB Asset Management AS boosted its stake in VMware by 49.2% in the third quarter. DnB Asset Management AS now owns 1,146,076 shares of the virtualization software provider’s stock valued at $84,065,000 after buying an additional 377,839 shares in the last quarter. Finally, Panagora Asset Management Inc. boosted its stake in VMware by 31.5% in the third quarter. Panagora Asset Management Inc. now owns 1,098,317 shares of the virtualization software provider’s stock valued at $80,562,000 after buying an additional 263,069 shares in the last quarter. 21.88% of the stock is currently owned by institutional investors and hedge funds.
About VMware
VMware, Inc is an information technology (IT) company. The Company is engaged in development and application of virtualization technologies with x86 server-based computing, separating application software from the underlying hardware. The Company offers various products, which allow organizations to manage IT resources across private clouds and multi-cloud, multi-device environments by leveraging synergies across three product categories: Software-Defined Data Center (SDDC), Hybrid Cloud Computing and End-User Computing (EUC).
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