EMC and VMWare confirm executive trades
Data center giant EMC Corp. and software company VMWare Inc. confirmed late Tuesday that the closely linked companies are trading some of their top executives as part of a broader business strategy.
EMC holds a majority stake in VMWare, and the technologies of the two companies are often closely tied. The announcement follows reports that built throughout the day suggesting that EMC was moving a key leader to VMWare as training grounds for its next CEO.
EMC executive Pat Gelsinger, 51, will become CEO of VMWare on Sept. 1. The move would reportedly give Gelsinger experience running a major company in preparation for a potential future role at EMC. He also will serve on the company's board.
He would replace Paul Maritz, 57, who would become a chief strategist at EMC. Maritz will remain on the VMWare board of directors.
"The next generation of software defined datacenters will be built by combining software with standardized hardware building blocks," Geslinger said in a statement. "VMware is uniquely positioned to be the leader in this endeavor and deliver a whole new level of value to customers."
EMC CEO Joe Tucci will remain in his job and has postponed plans to step down this year, according to a report by the Wall Street Journal. Gelsinger has been considered one of the main contenders to take over as CEO when Tucci leaves the job, and the VMWare role would give him a chance to try out the CEO role.
Gelsinger, who currently serves as EMC president and chief operating officer of information infrastructure products, joined the company 2009 after a long career at Intel Corp.
EMC also announced that David Goulden, the 53-year old executive vice president and chief financial officer of EMC, has been appointed president and chief operating officer of EMC.
Representatives from both companies did not immediately return calls for comment.
The two companies also pre-announced some of their quarterly financial results.
VMWare said its second-quarter revenue increased 22 percent to $1.12 billion from the same period of the prior year. Analysts polled by FactSet had expected revenue of $1.11 billion for the period.
It also said it expects full-year 2012 revenues to be between $4.54 billion and $4.64 billion; analysts have forecast $4.58 billion. The company said it would discuss its financial performance and outlook further during its earnings call on Monday.
EMC also said it earned 39 cents per share on an adjusted basis for its second quarter, up 11 percent from the prior year. Analysts were expecting 31 cents per share on an adjusted basis. Its revenue for the period jumped 10 percent to $5.31 billion, meeting market expectations.
The company said it continues to expect to earn $1.70 per share on an adjusted basis for the full year on revenue of $22 billion. Analysts are expecting EMC to earn $1.73 on revenue of $22.12 billion.
EMC shares jumped $1.63, more than 7 percent, to $24.55 in after-hours trading on the news. Its shares fell 37 cents to close regular trading at $22.92.
VMWare shares also soared, rising $4.71, nearly 6 percent, to $85 after hours. During the regular session, its shares had fallen $4.12, nearly 5 percent, to close at $80.29.