(By Balaseshan) VMware Inc. (NYSE:VMW), a provider of virtualization-based cloud infrastructure solutions, reported a 12.9% decline in quarterly earnings due to higher costs and expenses.
In a separate release, the company said it has agreed to buy Nicira Inc. for about $1.05 billion in cash plus about $210 million of assumed unvested equity awards. Nicira is a player in software-defined networking (SDN) and in network virtualization for open source initiatives. The parties expect the acquisition to close during the second half of 2012.
Profit fell 12.9% to $191.73 million for the second quarter, while earnings per share (EPS) plunged 13.7% to $0.44. Adjusted earnings rose to $295.53 million or $0.68 per share from $235.27 million or $0.55 per share.
Revenue jumped 21.9% to $1.12 billion.
Analysts, on average, had expected EPS of $0.66 on revenue of $1.12 billion for the second quarter.
License revenue increased 11% to $517 million, while service revenue, including software maintenance and professional services, climbed 33% to $606 million. U.S. revenues for the second quarter grew 22% to $551 million, while International revenues surged 22% to $572 million.
Looking ahead into the third quarter, the company expects revenue of $1.11 billion to $1.15 billion, while Street predicts $1.14 billion.
For the full year 2012, the company increased its revenue outlook to range of $4.540 billion to $4.635 billion from previous forecast of $4.525 billion to $4.625 billion, while Street predicts $4.59 billion.
VMware closed Monday's regular trading down 0.63% at $89.23. The stock has been trading between $74.69 and $118.79 for the past 52 weeks.