VMware, Inc. (NYSE: VMW), majority owned by privately held Dell, has reported the adjusted earnings per share of $1.43 in the fourth quarter of 2016, beating the analysts’ expectation of $1.40. The company has in the fourth quarter has reported the revenue growth of 8.7 percent to $2.03 billion, beating the consensus analysts’ expectation of $1.99 billion.As a result, VMW stock rose over 4% in Pre-market session on January 27th, 2017 (Source: Google finance). The stock has risen 70.14% in the last one year (source: Google Finance).
Moreover, VMware’s strong growth in the fourth quarter can be attributed in part to its increased software license revenues, a vital metric for the company, which topped $887 million for the quarter, an 8 percent increase from the fourth quarter of 2015. In an industry where software license revenues are generally on the decline due to the shift to cloud subscription services, this is a relatively impressive growth.
VMware has planned to buy back $1.2 billion of its stock through the end of FY 18, on February 2nd, in the open market or through private transactions, and will be subject to the market conditions. This share new buyback plan is in addition to the company’s existing $500 million plan announced in December 2016.
VMware has partnered with Amazon Web Services to provide a new VMware vSphere-based cloud service running on AWS. This new service will be delivered, sold and supported by VMW and will be available later in 2017. The partnership will allow VMW customers to migrate computing jobs run on VMW software to AWS’s cloud to take advantage of its more flexible and lower-cost storage and computing services and will be crucial if the company is to sustain its growth in 2017. In Europe, VMW has introduced a series of products and services that include VMware vSphere®, VMware vSAN™ and VMware vRealize® Automation designed to help customers accelerate their digital transformation.
Meanwhile, VMware in the first quarter of 2017 expects revenues in the range of $1.675 billion to $1.725 billion and earnings per share in the range of 93 to 96 cents. The consensus analysts’ expectation is of $1.69 billion in revenues and earnings per share of 96 cents.
VMware has reported the 150 percent jump in vSAN license bookings, and a 50 percent rise in NSX license bookings. Moreover, VMW has closed a $10 million NSX deal. NSX which pools networking hardware such as routers and switches and allows them to be reconfigured and managed through the software, is on track to bring in $1 billion this fiscal year.