VMware has 'challenging quarter,' but all eyes on Broadcom buyout: analyst
Sundry Photography

VMware's (NYSE:VMW) reported third-quarter results on Tuesday that were seen by many on Wall Street as "lackluster," but investment firm Monness, Crespi, Hardt said all eyes are on the next chapter in the company's history as it awaits approval of its acquisition by Broadcom (NASDAQ:AVGO).
Analyst Brian White, who has a buy rating on VMware (VMW), called the results "challenging," especially considering the second-quarter results were seen as so strong. 
"We believe the companyâs [third-quarter] performance highlights the headwinds swirling around in the current environment and follows a strong [second-quarter]," White wrote in a note to clients. 
White added that the $61B deal to acquire VMware (VMW) by Broadcom (AVGO) should close in the company's fiscal 2023 year, as VMware shareholders recently voted to approve the deal.
VMware (VMW) generated $3.211B in revenue and $1.47 per share in earnings, well below the $3.347B and $1.58 that Wall Street was expecting, as revenue growth slowed down to just 1% year-over-year, down from 6% growth in the prior quarter.
White added that the $621M in revenue generated from licenses was well below the firm's estimates of $756.2M, while subscription and software-as-a-service revenue of $988M rose 20% year-over-year, but were also below the firm's estimates of $994.9M. 
Services revenue clocked in at $1.602B, while deferred revenue was $11.217B and billings were up 4% to $3.197B.
Given that the company is still dealing with its pending Broadcom (AVGO) buyout, it did not provide any guidance.
Earlier this week, England's Competition and Markets Authority said it was looking into Broadcom's (AVGO) $61B pact to acquire VMWare (VMW) to see if it could result in a "substantial lessening of competition."