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VMware, Inc. (VMW)

  • Jun. 6, 2013, 9:09 AM
    Oracle (ORCL), Citrix (CTXS), and VMware (VMW) are downgraded to Sell by Berenberg. Oracle and Citrix are off fractionally, while VMware is up 3.1% in response to COO Carl Eschenbach's reassuring talk at a BofA/Merrill conference. Oracle's FQ4 report arrives on June 20.
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  • Jun. 5, 2013, 4:38 PM
    VMware (VMW, EMC) +1.6% AH after COO Carl Eschenback tries to use a BofA/Merrill conference talk to reassure investors on edge over EMC's cash flow guidance and downbeat sell-side commentary. Eschenbach has reiterated VMware's Q2/2013 guidance and operating cash flow targets (the latter might be below consensus), is optimistic about a 2H demand pickup, and claims the vCloud Suite is seeing good momentum. Shares fell 2.5% in regular trading following Deutsche's downgrade.
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  • Jun. 5, 2013, 9:36 AM
    VMware (VMW -0.9%) gets cut to Hold by Deutsche's Nandan Amladi, who's worried about competition, billings growth, and execution. VMware's vSphere virtualization platform "continues to face pricing pressures from [Microsoft's] Hyper-V," and the rise of OpenStack is "driving up adoption" of Citrix's (CTXS) Xen virtualization software and the Linux-based KVM. Lastly, checks "indicate a fair amount of interest" in Microsoft's (MSFT) System Center management tools, which compete with parts of VMware's vCloud Suite. IDC estimates VMware's virtualization share fell to 56.8% in 2012, and Microsoft's rose to 27.5%. (cash flow guidance) (Craig-Hallum)
  • Jun. 3, 2013, 4:20 PM
    Though VMware's (VMW -2.4%) management has declared the cash flow guidance recently provided by parent EMC inaccurate (due to differences in accounting), subsequent talks with management "imply that they are not entirely comfortable with Street numbers," says Nomura's Rick Sherlund, following up on his Friday note. Management's remarks suggest op. cash flow growth will match op. income growth - Sherlund had been forecasting the former would grow 15%, and believes the consensus for the latter was 24%. He doesn't know whether the shortfall is due to "high receivables or working capital," or demand issues, but thinks the lack of clarity makes for an "awkward situation." Investors don't seem thrilled either.
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  • May. 31, 2013, 12:51 PM
    VMware's (VMW +1.1%) guidance is unchanged, claims Nomura's Rick Sherlund after talking with management about yesterday's EMC cash flow forecasts, which included VMware forecasts that were well below consensus. Sherlund points out EMC and VMware recognize cash flow differently, and says channel checks point to a roughly in-line Q2. But he is concerned about a dearth of specialists and partners to push VMware's huge vCloud Suite (covers virtualization, data center management, and cloud management software), which underpins the company's efforts to grow in the face of slowing vSphere virtualization software demand.
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  • May. 30, 2013, 5:12 PM
    More on EMC/VMware: EMC (EMC +5.3%) is guiding for VMware (VMW -1.3%) to produce 2013 operating cash flow of $1.875B and free cash flow of $1.525B. That's well below Stifel's consensus figures of $2.37B and $2.01B. UBS' Brent Thill defends VMware, arguing EMC's forecast is conservative given it implies a 9% Y/Y drop in VMware's operating cash flow for the rest of 2013 (it grew 17% in Q1). Thill sees such a decline as unlikely in light of strong renewal trends for VMware's costly enterprise license agreements (ELAs).
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  • May. 30, 2013, 1:41 PM
    EMC (EMC +5.3%) and 80%-owned VMware (VMW -1.6%) head in opposite directions after the former issued fresh guidance to go with news it's raised its buyback authorization by $5B to a remaining $5.5B, initiated a dividend, and promised to spend $3B on buybacks between now and Q2 2014. Though EMC reiterated its 2013 free cash flow guidance of $5.5B, Stifel thinks the specifics suggest VMware's cash flow estimates are too high. EMC's outstanding authorization, which lasts until the end of 2015, is good for buying 10.5% of shares at current levels. Wells Fargo sees the buybacks lifting 2014 EPS by $0.11. Deutsche sees EMC's dividend rising over time.
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  • May. 21, 2013, 7:07 PM
    VMware (VMW, EMC) officially launches its vCloud Hybrid Service, which allows clients to pair on-premise workloads with a VMware-run public cloud infrastructure. VMware claims the service supports more than 90 OS', has high-availability options, and allows public and on-premise workloads to be jointly managed. VMware also says it will offer SAP software, including Hana, "as a subscription service on premise and in the cloud." vCloud Hybrid competes with Amazon Web Services, Microsoft's Azure (perhaps the most direct rival), and Rackspace's OpenStack offerings. ITWorld calls it "ideal for a significant set of enterprise applications," but adds it's "no Amazon killer," given AWS' focus on low cost and ease-of-use.
  • May. 16, 2013, 12:16 PM
    Cisco JV partner EMC (EMC +4.5%) joins the list of companies rallying in response to Cisco's FQ3 beat and guidance. Cisco mentioned on its earnings call integrated hardware solutions such as Vblock (offered by the Cisco/EMC VCE JV) are driving demand for its UCS servers - Cisco's UCS unit saw 77% Y/Y rev. growth. All in all, it's a good day for enterprise IT names, who are happy to receive some good earnings news after getting plenty of bad news (I, II, III, IV). HPQ +1.7%. IBM +1.3%. ORCL +1.3%. VMW +2.6%. TIBX +4.1%. CTXS +3.9%. CRM +3.8%. JIVE +4.1%. NTGR +2.7%. CVLT +2.6%. INFA +3%. (others rallying: I, II)
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  • May. 13, 2013, 12:53 PM
    FBR has upgraded Cisco (CSCO +0.3%) to Market Perform ahead of Wednesday's FQ3 report. Less than 2 months after downgrading Cisco and Juniper (JNPR -0.5%) on a belief software-defined networking (SDN) will drastically lower switch/router demand, the firm says talks suggest SDN overlay solutions - Cisco, Juniper, and VMware (VMW) are pushing them - are gaining traction relative to products requiring big hardware changes, and that this should limit near-term sales pressure. Though rivals doubtlessly disagree, Cisco has been arguing its SDN solution can offer superior intelligence, thanks to its integration with Cisco hardware. (switch competition)
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  • May. 9, 2013, 12:45 PM
    Four downgrades are levied on Rackspace (RAX -26.3%) following yesterday's Q1 revenue miss, accompanied by worrying business metrics. Slowing growth and a slumping EBITDA margin (due to price cuts) are problems that will get worse as Microsoft and Google ramp their cloud offerings, argues CLSA, which has cut shares to Sell. The firm adds checks indicate "mid-tier to large firms" are increasingly migrating from hosting to cloud services, and expects OpenStack to be immaterial to RAX's bottom line for the next 1-2 years. Stephens, making a contrarian upgrade to Overweight, thinks "new contract wins are on the horizon," as Rackspace targets enterprises. EQIX -2.2%. COR -4.2%. INXN -3.3%. VMW -2.5%. (transcript)
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  • May. 7, 2013, 11:41 AM
    EMC (EMC -0.4%) and VMware (VMW -0.5%) plan to cut 1,800 jobs in a restructuring expected to be finished this year, EMC discloses in its Q1 10-Q. EMC proper expects to cut 1,004 positions (yes, they're that precise), and VMware 800. In January, VMware said it planned to cut 900 jobs in a restructuring; recent asset sales might have lowered that figure. Also: Topeka's Brian White expects EMC to refresh its mid-range VNX storage line at this week's EMC World conference, as well as intro new technology for pooling storage and server resources. (EMC ViPR)
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  • May. 1, 2013, 11:27 AM
    VMware (VMW, EMC) continues its housecleaning, selling the assets for its WaveMaker Java cloud app development tool business to startup incubator Pramati (likely for a small sum). The deal comes 2 years after VMware bought WaveMaker, arguing it complements its SpringSource Web app tool unit (now part of the Pivotal Initiative), and 2 months after it unloaded online PowerPoint rival SlideRocket, as it tries to focus on its core virtualization/infrastructure management businesses amidst intensifying competition.
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  • Apr. 24, 2013, 3:59 PM
    "With Hyper-V and OpenStack becoming more competitive, the core virtualization market increasingly saturated and the macro-economy not showing any signs of robust growth, we continue to remain on the sidelines," writes Craig-Hallum on VMware (VMW -5.9%). Given VMware's light revenue forecasts and Microsoft's boasts of Hyper-V share gains, concerns about virtualization growth seem well-placed. The big question is whether the vCloud Suite, Nicira, and other infrastructure management solutions will compensate. Credit Suisse argues these offerings will fuel a recovery, but Bernstein is concerned they'll impact margins. (GE/Pivotal) (transcript)
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  • Apr. 24, 2013, 11:20 AM
    GE is investing $105M to obtain a 10% stake in EMC (EMC +0.9%) and VMware's (VMW -4.7%) Pivotal big data/app development tool spinoff ahead of an IPO; given the valuations assigned to peers, GE might've gotten a good deal. GE and Pivotal are also forming an R&D partnership "aimed at accelerating GE's ability to create new analytic services and solutions," with an eye towards industrial, energy, and healthcare applications. The announcement comes as VMware declines due to soft guidance marked by slumping license growth. EMC is faring better after reaffirming guidance in spite of a Q1 miss.
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  • Apr. 23, 2013, 4:17 PM
    Though VMware's (VMW) Q1 results beat estimates, Q2 guidance is for revenue of $1.21B-$1.24B, below a $1.26B consensus. 2013 guidance is for revenue of $5.12-$5.24B vs. a $5.21B consensus. License revenue is expected to grow 6%-9% in 2013, compared with total revenue growth guidance of 11%-14%. License revenue rose only 1% Y/Y in Q1, whereas total revenue (lifted by services) rose 13%. VMW -6.2% AH. EMC -2.3%. CC at 5PM ET (webcast). (PR)
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Company Description
VMWare, Inc., provides virtualization infrastructure solutions utilized by organizations. It has three product areas: Software-Defined Data Center, End-User Computing, and Hybrid Cloud Computing.