* Sees second-quarter revenue $1.43 bln-$1.47 bln vs est
* First-quarter adjusted earnings $0.80/share vs est $0.79
* Revenue $1.36 bln vs est $1.35 bln
(Adds details from conference call, updates share movement)
By Sruthi Ramakrishnan
April 22 Virtualization software maker VMware
Inc reported better-than-expected first-quarter revenue
and forecast current-quarter revenue largely above analysts'
average estimate as more customers opt for its cloud
However, the company's shares slipped more than 6 percent in
extended trading after it acknowledged a delay in closing some
of its enterprise license agreements (ELAs) in the first quarter
as customers looked to sign expanded deals.
VMware has not lost any of those deals to competitors, Chief
Operating Officer Carl Eschenbach said on a conference call with
"We're seeing size and scope of our ELAs continue to grow as
customers look to incorporate all of our products and even some
of our new products... we're just in much deeper conversations
with our customers," he said.
While ELA activity was strong in the first quarter, bullish
investors may have been hoping for more, FBR Capital Markets
analyst Daniel Ives said.
VMware, in which data storage equipment maker EMC Corp
holds an 80 percent stake, forecast current-quarter
revenue of $1.43 billion to $1.47 billion. Analysts on average
were expecting revenue of $1.44 billion, according to Thomson
"We're off to a solid start in Q2 and have already closed a
number of ELAs in April," Eschenbach said.
License revenue rose about 15 percent, to $561 million, in
the quarter ended March 31. Long-term license agreements,
including maintenance and support, make up a quarter to a third
of VMware's sales.
Virtualization software enables the creation of a virtual
machine that acts like a real computer with an operating system,
helping the company's clients use server and storage space more
efficiently and reduce IT costs.
The company also said there was strong demand for its vCloud
software suite, which helps virtualize networks and associated
security services along with server and storage space, with
about half the enterprise license deals signed in the first
quarter including the product.
VMware's net income rose to $199 million, or 46 cents per
share, in the first quarter ended March 31, from $173 million,
or 40 cents per share, a year earlier.
Excluding items, the company earned 80 cents per share.
Revenue rose to $1.36 billion from 1.19 billion a year
Analysts on average expected earnings of 79 cents per share
on revenue of $1.35 billion, according to Thomson Reuters
VMware shares, which have risen 43 percent in the last year,
fell 5.7 percent to $99.12 in extended trading on Tuesday. They
closed at $105.15 on the New York Stock Exchange.
(Reporting by Supantha Mukherjee and Sruthi Ramakrishnan in
Bangalore; Editing by Simon Jennings)