VMware posts higher-than-expected revenue, announces job cuts

(Reuters) - VMware Inc reported higher-than-expected quarterly revenue as demand rose for its virtualization software, which helps customers cut costs by running multiple operating systems on a single machine.

The company also appointed a new chief financial officer and said it would cut about 800 jobs.

Shares of VMware, whose parent EMC Corp is being acquired by Dell Inc [DI.UL], rose about 4 percent to $50.68 in extended trading on Tuesday.

VMware appointed EMC Chief Financial Officer Zane Rowe its finance chief, effective March 1. Rowe will replace CFO and Chief Operating Officer Jonathan Chadwick, who is quitting.

VMware's services revenue rose 12.6 percent to $1.04 billion in the fourth quarter, accounting for more than half of its total revenue. License revenue increased 6.2 percent to $825 million.

 

The company said it would take a charge of $55 million-$65 million in the first half of 2016 related to the job cuts.

VMware's net income rose 14.4 percent to $373 million, or 88 cents per share, in the quarter ended Dec. 31.

Revenue rose 9.7 percent to $1.87 billion, topping analysts' expectations of $1.85 billion, according to Thomson Reuters I/B/E/S.

Excluding items, VMware earned $1.26 per share, slightly higher than the average analyst estimate of $1.25.

(Reporting by Sai Sachin R in Bengaluru; Additional reporting by Sruthi Shankar in Bengaluru; Editing by Kirti Pandey)