The shares of VMware, Inc. (NYSE:VMW) closed $88.19 per share, but the stock declined to $87.22 per share during the extended hours trading around 5:05 in the afternoon in New York. The company’s stock was impacted by its earnings decline for the third quarter.
During the third quarter, VMware, Inc. (NYSE:VMW) reported a 26% decline in net income to $194 million or $0.45 per diluted share from $261 million or $0.60 per diluted in the year-ago quarter.
Its non-GAAO net income was $377 million or $0.87 per diluted share compared with the $363 million or $0.84 per diluted share in the same period a year ago. Wall Street analyst expected VMware, Inc. (NYSE:VMW) to report $0.83 per share.
VMware, Inc. (NYSE:VMW) said its revenue increased 18% to $152 billion, in line with the $1.5 billion consensus estimate.
The company ended the period with $7.09 billion in cash, cash equivalents and short-term investments. Its unearned revenues were $4.37 billion.
VMware CFO says revenue shows strong customer adoption
In a statement, Jonathan Chadwick, CFO of VMware, Inc. (NYSE:VMW) said the company’s revenue showed a strong customer adoption for its products and services. He said, “We are especially pleased by the performance of our newer businesses such as mobility, networking, storage, and hybrid cloud, which made significant progress in delivering against our long-term strategy.”
On the other hand, VMware CEO Pat Gelsinger said, “In every region of the world, customers are making a long-term bet on VMware to help them transform their businesses and embrace a new model for IT. Customers are looking to VMware for technology choices that liberate them from the constraints of hardware, and which offer a new model for security, optimized for a world of millions of applications.”
Elliot pushes EMC Corporation to spinoff VMware
Earlier this month, Paul Singer’s Elliott Management sent a letter to the board of directors of EMC Corporation (NYSE:EMC) to spinoff VMware, Inc. (NYSE:VMW). According to the activist hedge fund, the company’s Federation structure is no longer viable and “obscures enormous value.”
Eliott emphasized that VMware, Inc. (NYSE:VMW) and its parent company, EMC Corporation (NYSE:EMC) have grown and competing each other. They are also confusing analysts, shareholders, customers and employees.