VMware Inc. (NYSE: VMW) reported its fourth quarter and full year financial results for fiscal year 2018. The company beat estimates in both revenues and earnings, but shares fell by 5 percent after the opening bell on Friday while the company waited for Dell’s decision for a merger.
For the fourth quarter, VMware reported revenue of $2.31 billion, increasing 14 percent year over year, and beating analysts’ estimates of $2.26 billion. The company reported an EPS of $1.68, increasing 18 percent year over year, and beating analysts’ estimates of $1.63.
VMware’s revenue was attributable to a strong demand for its software that allows a computer or server to perform the work of multiple computers into one, making businesses much more efficient and cutting expenses.
“Our strong Q4 and terrific fiscal year 2018 results demonstrate the power of our broad-based portfolio and a strategy that continues to resonate, resulting in strong customer momentum,” said Pat Gelsinger, chief executive officer, VMware. “
Earlier on Thursday, Dell Chief Executive Officer, Michael Dell was working on potentially combining his own private company with VMware to merge into one public corporation. Dell already owns approximately an 80 percent stake in VMware through EMC Corp.
But Dell has multiple strategic options, as sources said back in January. One of the options was possibly re-filing for its own initial public offering, but sources said there might not be any strategic moves at all.
As of now, it seems like Dell’s merger with VMware is more likely than other possibilities sources had said.
“We are experiencing broad momentum from our Dell partnership,” Chief Executive Officer Patrick Gelsinger said on a conference call with analysts following the results.
For fiscal year 2019, VMware is forecasting an EPS of $6.02 and revenue of $8.73 billion. Analysts are forecasting an EPS of $5.59 and revenue of $8.64 billion.