VMware Inc reported a better-than-expected rise in quarterly revenue, helped by strong sales of its newer virtualization software, and the company also said it would buy back $1.2 billion of its Class A stock this year. Strong acceptance of its newer offerings also helped VMware forecast second-quarter revenue largely above analysts' estimates, helping send the company's shares up 8.7 percent to $55.95 in after-hours trading on Tuesday.
VMware's new virtualization offerings include NSX, which makes networking more efficient, and vSAN, which organizes data in a way that increases storage capacity inside servers. The company expects second-quarter revenue of $1.66 billion to $1.71 billion, compared with analysts' average estimate of $1.66 billion, according to Thomson Reuters I/B/E/S.
Palo Alto, California-based VMware, which has been struggling on multiple fronts, is hoping those new products will offset declining demand for its traditional server-virtualization software. Sales of VMware's flagship vSphere software, which helps companies cut costs by running multiple operating systems on a single machine, have fallen as the market for the software has matured and customers shift to the cloud.
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