EMC shares fall on weak VMware bookings growth
(Reuters) - EMC Corp (EMC.N), the world's largest maker of data storage equipment, reported a better-than-expected quarterly revenue, but its shares fell after majority-owned software maker VMware Inc (VMW.N) reported weak growth in bookings.
VMware, in which EMC owns an 80 percent stake, said on Tuesday there had been a delay in closing some large contracts in the first quarter, overshadowing better-than-expected results.
EMC's shares were down 3.8 percent at $25.73 in afternoon trading on the New York Stock Exchange on Wednesday. VMware shares were down 9 percent at $95.11.
"(EMC) beat Street expectations in its "bread-and-butter" storage business given accelerating growth ... on its emerging storage business, which we believe remains a key ingredient in the company's recipe for success in 2014/2015," FBR Capital Markets analysts Daniel Ives said in a note.
EMC affirmed its full-year adjusted profit forecast at $1.90 per share as foreshadowed in January to take into account VMware's $1.54 billion AirWatch acquisition in January. Analysts on average expect a profit of $1.94 per share.
EMC also affirmed its full-year revenue forecast of $24.58 billion. Analysts were expecting revenue of $24.51 billion, according to Thomson Reuters I/B/E/S.
EMC's revenue rose to $5.48 billion in the first quarter ended March 31, topping the average analyst estimate of $5.43 billion.
The company's net income fell to $392 million, or 19 cents per share, in the quarter from $580 million, or 26 cents per share, a year earlier.
Excluding items, the company earned 35 cents per share, meeting analysts' expectations, according to Thomson Reuters I/B/E/S.
The company also increased its quarterly cash dividend by 15 percent to 11.5 cents per share.
EMC's shares were down 4.6 percent at $25.56, while VMWare shares were down 8.69 percent at $96.02.
(Reporting by Soham Chatterjee and Sruthi Ramakrishnan; Editing by Saumyadeb Chakrabarty; and Sriraj Kalluvila)