Dell Technologies Inc. and VMware Inc. shares inched lower in Tuesday’s extended session, following initial gains, after both tech companies topped Wall Street expectations.
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Dell reported third-quarter net income of $881 million, or $1.08 a share, compared with $552 million, or 66 cents a share, in the year-ago period. Adjusted earnings, which excludes stock-based compensation expenses and other items, were $2.03 a share, compared with $1.75 a share in the year-ago period.
Dell’s adjusted revenue, the metric that analysts cite in their estimates, increased to $23.52 billion from $22.93 billion in the year-ago quarter. Analysts surveyed by FactSet had forecast earnings of $1.41 a share on revenue of $21.88 billion.
“We met unprecedented demand for remote work and learn solutions this quarter while increasing revenue to $23.5 billion,” said Jeff Clarke, Dell vice chairman and chief operating officer, in a statement. “At the same time, we accelerated our as-a-Service strategy and hybrid cloud capabilities at the edge — positioning us to win in these growing markets and making it easy for customers to manage data and workloads across all their operations.”
Meanwhile, VMware also topped Wall Street expectations and raised its outlook for the year. VMware reported third-quarter net income of $434 million, or $1.02 a share, compared with $407 million, or 96 cents a share, in the year-ago period. Adjusted earnings, which excludes stock-based compensation expenses and other items, were $1.66 a share, compared with $1.49 a share in the year-ago period.
VMware’s revenue rose to $2.86 billion from $2.66 billion in the year-ago quarter. Analysts surveyed by FactSet had forecast earnings of $1.44 a share on revenue of $2.81 billion.
“Subscription and SaaS revenue increased 44% year-over-year in Q3 and surpassed license revenue for the first time,” said Zane Rowe, VMware’s chief financial officer, in a statement. The company reported $676 million in subscription and SaaS revenue for the quarter.
VMware said it was raising its outlook for the year to adjusted earnings of $7.03 a share on revenue of about $11.7 billion, while analysts had forecast $6.66 a share on revenue of $11.62 billion.
For the year, Dell shares are up 37%, while VMware shares have declined 0.8%, compared with a 13% rise in the S&P 500 index SPX,
