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VMware Forecast Meets Estimates on New Contracts

Wednesday, 18 Apr 2012 05:35 PM

VMware Inc., the biggest maker of software that enables computers to run multiple operating systems, forecast that sales in the second quarter will meet analysts’ estimates as more companies sign contracts for its software.

Sales in the quarter ending June 30 will be $1.1 billion to $1.12 billion, the Palo Alto, California-based company said in a statement Wednesday. That compares with the $1.1 billion average estimate of 36 analysts surveyed by Bloomberg. In the first quarter, profit, excluding some items, was 66 cents a share, beating the 60-cent estimate of 38 analysts.

VMware is benefiting as customers install its virtualization software to cut costs by making their servers more efficient and by setting up data centers for cloud computing. Companies are signing more new multiyear licensing agreements to use VMware’s software, Adam Holt, an analyst at Morgan Stanley, wrote in a note Tuesday.

Net income in the first quarter rose to $191.4 million, or 44 cents a share, from $125.8 million, or 29 cents, a year earlier, VMware said. Sales rose to $1.06 billion from $843.7 million, exceeding the $1.03 billion average estimate of 36 analysts.

The company, majority-owned by EMC Corp., said last week that results for the current quarter would “broadly meet or slightly exceed” guidance it gave in January. That month it forecast first-quarter sales of $1.02 billion to $1.04 billion.

The software maker announced a management shuffle last week, including the departure of Chief Financial Officer Mark Peek, who helped take it public in 2007. Earnings have more than doubled to $723.9 million since 2008, the first full year after Peek joined.

VMware also said on April 11 that Carl Eschenbach has been promoted to chief operating officer and co-president, while Raghu Raghuram was promoted to executive vice president of cloud infrastructure and management.

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Wednesday, 18 Apr 2012 05:35 PM
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