Shares of virtualization software maker VMware Inc. (VMW), a unit of data storage solutions provider EMC Corp. (EMC), gained almost 8 percent in extended trade Tuesday after the company reported better-than-expected revenues for the second quarter and raised its revenue outlook for fiscal 2012. VMware also named Pat Gelsinger as the new chief executive officer of the company. He replaces Paul Maritz, who will take on a new technology strategist role at EMC, but will remain a board member of VMware. Gelsinger is currently president and chief operating officer of EMC Information Infrastructure Products. His appointment as CEO of VMware is effective September 1, 2012.
Maritz said, "Pat, with his deep passion for technology and track record, will complement the strong management team that is already in place at VMware, recently strengthened by the promotion of Carl Eschenbach to Chief Operating Officer. This all means that I can devote my time to developing the strategy of EMC as it relates to big data and a new generation of cloud-oriented applications." Gelsinger, aged 51, joined EMC in 2009 as president and COO of EMC Information Infrastructure Products. He has overseen the introduction of the largest product set in EMC history, accelerated EMC's push into unified storage and led EMC into new market segments including Big Data and flash storage.
Prior to joining EMC, Gelsinger spent 30 years at Intel Corp. (INTC).
Maritz was one of the early leaders of Microsoft Corp. (MSFT) before becoming CEO of VMware. He will assume responsibility for EMC's CTO Office, M&A, strategic investments and emerging technologies. He will report to Joe Tucci, chairman of VMware's board of directors and also Chairman and CEO of EMC.
Commenting on the appointments, Tucci said, "The strong teams that we now have in place at VMware and EMC allow me to ask Pat and Paul to take on two of the defining challenges and opportunities of the new, unfolding IT era: Cloud Infrastructure and big data. They have unique backgrounds and skills, and I look forward to continuing to work with both of them." Announcing its preliminary results for the second quarter, VMware reported a 22 percent increase in revenues to about $1.123 billion, compared to its guidance of $1.10 billion to $1.12 billion.
On average, analysts polled by Thomson Reuters expect the company to report revenues of $1.11 billion. Analysts' estimates typically exclude special items.
Looking ahead to fiscal 2012, VMware raised its outlook for revenues to a range of $4.540 billion to $4.635 billion from the prior range of $4.525 billion to $4.625 billion. Analysts expect the company to report revenues of $4.59 billion.
VMware will discuss further details about its second-quarter results and full-year business outlook during its earnings call on Monday, July 23, 2012. VMW closed Tuesday's trading at $80.29, down $4.12 or 4.88 percent on a volume of 5.86 million shares. However, in after-hours, the stock gained $6.40 or 7.97 percent to $86.69.
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