After the market close on Tuesday, the provider of virtualization infrastructure solutions reported earnings of $1.26 per share, slightly higher than analysts' forecasts for earnings of $1.25 per share.
Revenue rose by 10% year-over-year to $1.87 billion, below analysts' estimates for revenue of $1.85 billion.
Additionally, VMWare announced it was cutting 800 jobs to focus on "growth products."
The company's core products face pressure, which has not been completely offset by new products, Oppenheimer& Co. said in a note on Wednesday. The firm lowered its 2017 earnings projection for VMWare to $4.20 per share from $4.55 per share.
"Management is tightening the cloud strategy, restructuring, and shifting resources to growth initiatives," the firm said. "However, it's unclear whether the magnitude/pace of new product gains can offset the decline in the core for a long period of time. Given the persistent secular/cloud headwinds and macro uncertainty, it's hard to see what brings stability to the core."
Separately, recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
TheStreet Ratings rates this stock as a "hold" with a ratings score of C. The primary factors that have impacted our rating are mixed - some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures and notable return on equity. However, as a counter to these strengths, we also find weaknesses including weak operating cash flow and a generally disappointing performance in the stock itself.
You can view the full analysis from the report here: VMW