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VMware profit beats estimates, names new CFO
October 23, 2012 / 8:50 PM / 5 years ago

VMware profit beats estimates, names new CFO

(Reuters) - Software maker VMware Inc’s (VMW.N) third-quarter profit beat estimates on stronger-than-expected sales to the U.S. government, but it forecast current-quarter revenue in a range largely below expectations.

VMware also named Jonathan Chadwick as its new chief financial officer on Tuesday. Chadwick has previously served as Microsoft Corp’s (MSFT.O) corporate vice president and as the CFO of Skype.

“The CFO has been a vacant position in the company for quite some time and its good to see a CFO hired with good solid industry experience,” ISI Group analyst Brian Marshall said.

VMware, a publicly traded division of storage giant EMC Corp EMC.N, forecast fourth quarter revenue of $1.26 billion to $1.29 billion, compared with analysts’ expectations of $1.28 billion, according to Thomson Reuters I/B/E/S.

Net profit fell to $157 million, or 36 cents per share, from $178 million, or 41 cents per share, a year earlier. Revenue rose 20 percent to $1.13 billion from $942 million.

Excluding items, the company earned 70 cents per share.

Analysts, on average, had forecast $1.13 billion in revenue and earnings of 63 cents per share.

U.S. revenues grew 25 percent to $554 million from the year-ago quarter, the company said.

“We had a solid third quarter with a slightly better than anticipated business with the U.S. federal government,” Chief Operating Officer Carl Eschenbach said on a conference call with analysts. “U.S. federal government bookings grew slightly year-over-year and finished higher than expected.”

“Offset by challenges in some countries, particularly within the EMEA (Europe, Middle East & Africa) region and Australia, we remain cautious about the potential for slower IT spending as we exit 2012 and enter 2013,” he added.

VMware is the biggest maker of the so-called virtualization software that reduces the number of servers companies need. It competes with Oracle Corp ORCL.O in that market and with Inc (CRM.N) in offering “cloud” computing services.

Shares of the Palo Alto, California-based company were up 2 percent at $85.41 in extended trade. It closed at $83.72 on Tuesday on the New York Stock Exchange.

Reporting by Aurindom Mukherjee in Bangalore; Editing by Richard Chang

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