VMware's Q3 solid; Outlook in line as new CFO named

VMware reported strong third quarter earnings, said the fourth quarter will be in line with estimates and named a new chief financial officer.

The virtualization software company's results show it can weather some economic turbulence. Many enterprise vendors have said customers have become cautious on IT spending.

VMware reported third quarter earnings of $157 million, or 36 cents a share, on revenue of $1.13 billion, up 20 percent from a year ago. Non-GAAP earnings for the quarter were 70 cents a share. VMware was expected to report third quarter non-GAAP earnings of 63 cents a share on revenue of $1.13 billion.

As for the outlook, VMware projected fourth quarter revenue to be between $1.26 billion and $1.29 billion. Wall Street was looking for $1.27 billion. Annual revenue will be about $4.57 billion and $4.6 billion, in line with the $4.59 billion expected by Wall Street.

In addition, VMware named Jonathan Chadwick CFO. Chadwick most recently had been CFO of Microsoft's Skype unit. He was also CFO at McAfee and an executive at Cisco.

Pat Gelsinger, CEO of VMware, said that the company delivered a solid quarter and its software defined data center is gaining momentum.

By the numbers:

• U.S. revenue in the third quarter was $554 million, up 25 percent from a year ago.
• International revenue was $580 million, up 16 percent.
• License revenue in the third quarter was up 11 percent from a year ago. Service revenue was up 29 percent.
• VMware said it had 44.4 billion in cash and equivalents as of Sept. 30.