Investing.com -- Shares in VMware Inc (NYSE:VMW) surged more than 9% in after-hours trading after the leading cloud and virtualization software provider reported mixed quarterly results on Tuesday afternoon.
During VMWare's first quarter of Fiscal Year 2016, the Palo Alto-based company finished with revenues of $1.6 billion, an increase of 5.2% on a year-over-year basis, amid considerable gains in license sales on a constant currency basis. VMWare reported net profits of $161 million or 0.38 per share, down 18% from earnings of $196 million or 0.45 per share, amid rising Realignment, Research & Development and Sales and Marketing charges over the period.
The increased realignment expenses stem from a proposed restructuring plan launched in January that could result in the elimination of up to 800 positions. Still, VMWare finished with adjusted earnings per share of 0.86, slightly above analysts' forecasts of 0.84. VMWare's revenues, meanwhile, finished in line with consensus estimates.
VMWare CEO Pat Gelsinger described the first quarter as a strong start to the new fiscal year.
"We made solid progress with our strategic goal of building momentum for our newer growth businesses and in the cloud," Gelsinger said in a statement. "We continue to see momentum across our portfolio of growth products and businesses, including NSX, Virtual SAN and End-User Computing."
In addition, VMWare finished the quarter with operating cash flow of $720 million, while the company had cash, cash equivalents and short-term investments of $8.25 billion as of March 31. Also on Tuesday, VMWare's Board of Directors authorized the company to repurchase $1.2 billion of its Class A common stock through December 31.
"Our intent to repurchase $1.2 billion of stock this year underscores the confidence we have in the business and reinforces our capital allocation strategy, which includes returning capital to shareholders," VMWare CFO Zane Rowe said in a statement.
Shares in VMWare surged 4.79 or 9.31% to 56.25 in after-hours.