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VMware's net income falls 9 percent in 1st-qtr

Tue, 04/23/2013 - 6:19pm
The Associated Press

VMware Inc. said Tuesday that its net income fell about 9 percent in the first quarter, hurt by a realignment charge that partially offset strong revenue growth for the software maker.

The company also issued a full-year revenue outlook that beat Wall Street's expectations, but its second-quarter revenue forecast fell short.

VMware shares dropped more than 6 percent in after-market trading.

Net income was $173.6 million, or 40 cents per share, for the three months ended March 31. That compares with $191.4 million, or 44 cents per share, in the same period a year ago.

The latest results included $62.9 million in realignment charges.

Excluding one-time items, adjusted earnings were 74 cents per share in the latest quarter. Revenue rose 13 percent to $1.19 billion.

Analysts expected adjusted earnings of 70 cents per share on revenue of $1.18 billion, according to FactSet.

Services revenue made up the biggest part of total revenue, increasing about 23 percent to $703.2 million. License revenue edged up 1.3 percent to $488.2 million.

VMware's virtualization software allows one computer to function as multiple machines, which can help companies save energy and other costs.

In January VMware announced 900 job cuts, or nearly 7 percent of its workforce, as well as plans to exit some lines of business and consolidate facilities this year.

VMware expects full-year revenue of $5.12 billion to $5.24 billion. Wall Street's forecast calls for $5.22 billion.

For the second quarter, the company projects revenue of $1.21 billion to $1.24 billion. Analysts expected $1.26 billion.

VMware shares ended regular trading up $1.91, or 2.6 percent, at $75.70. The stock tumbled $4.89, or 6.5 percent, to $70.81 in extended trading. Shares have declined about 20 percent this year.

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