VMware fourth-quarter revenue, profit beats estimates

(Reuters) - Virtualisation software maker VMware Inc reported better-than-expected quarterly revenue and profit, on strong demand for its products that help cut the cost of moving data to the cloud. The company's shares rose 3.4 percent to $83.35 in extended trade after the company also doubled its share buyback programme to $2 billion (1£1 billion). VMware, like rival Citrix Systems Inc, makes software that enables the creation of a virtual machine that act like a real computer with an operating system, helping clients use server and storage space more efficiently. VMware's total revenue rose 14.8 percent to $1.70 billion in the fourth quarter ended Dec. 31, as income from both licenses and services rose. Services revenue rose 16.3 percent to $926 million. Contracts for software maintenance and support made up more than 54 percent of total revenue. But net income fell to $326 million, or 75 cents per share, from $335 million, or 77 cents per share. Excluding items, the company earned $1.08 per share. Analysts on average had expected profit of $1.06 per share on revenue of $1.69 billion, according to Thomson Reuters I/B/E/S. VMware's parent EMC said earlier this month it had reached a standstill agreement with activist investor Elliott Management Corp, prohibiting the hedge fund from publicly pushing EMC to spin off VMware or pursue other merger opportunities until September. Paul Singer-controlled Elliott has a 2.2 percent stake in EMC. (Reporting By Sai Sachin R in Bengaluru; Editing by Ted Kerr and Savio D'Souza)