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Earnings Results: VMware beats on earnings as it awaits Broadcom acquisition approval

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VMware Inc.’s profit declined less than expected in the second quarter, as the software company awaits approval for an acquisition by chip maker Broadcom Inc.

VMware
VMW,
+2.31%

on Thursday reported second-quarter earnings of $347 million, or 82 cents a share, on revenue of $3.34 billion, up from $3.14 billion a year ago. After adjusting for stock-based compensation, taxes and other effects, the software company reported earnings of $1.64 a share, down from $1.75 a share last year.

Analysts on average expected adjusted earnings of $1.57 a share on sales of $3.3 billion, according to FactSet. Shares bounced between slight gains and losses in after-hours trading immediately following the release of the results, after closing with a 2.6% increase at $122.01.

Broadcom
AVGO,
+3.63%

announced its intention to acquire VMware in late May for $61 billion in cash and stock in a big addition to its software holdings, which also include Symantec’s enterprise security business and CA Inc. VMware was allowed to shop for better bids in the deal, but the “go-shop” period ended after 40 days and the deal is now expected to go through sometime in the next year and value VMware stock at roughly $142.50 a share.

VMware executives are not expected to hold a conference call related to earnings results, a common practice as a company awaits an acquisition to go through.

VMware stock has gained more than 5% this year, as the S&P 500 index
SPX,
+1.41%

has declined 13.2%.

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