Broadcom acquisition could add drama to VMware's Thursday earnings report
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The short, but active drama involving Broadcom's (NASDAQ:AVGO) reported acquisition of VMware (NYSE:VMW) may come to a close before the end of the week, and provide some unexpected extra attention towards VMware's (VMW) quarterly report on Thursday.
Analysts estimate that VMware (VMW) will post a profit of $1.56 a share, on revenue of $3.19 billion for its fiscal first-quarter this year, when it delivers its results after the market closes on Thursday. During the same period a year ago, VMware (VMW) reported first-quarter earnings of $1.52 a share, on $2.73 billion in revenue.
Reports that Broadcom (AVGO) was in talks to acquire VMware (VMW) for $140 a share, or $60 billion in cash and stock, surfaced on Monday, with the Wall Street Journal saying that the deal will likely be announced on Thursday.
Such an announcement would make sense as it would coincide with not only VMware's (VMW) earnings results, but those of Dell Technologies (NYSE:DELL), which is on tap to deliver its first-quarter report following Thursday's market close. Dell (DELL) Chief Executive Michael Dell is also VMware's (VMW) chairman, and it was just six months ago that Dell (DELL) spun off the 81% of VMware (VMW) that it still owned at that time.
It is expected that Broadcom (AVGO) will face a certain degree of antitrust scrutiny should it purchase VMware (VMW).