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(Reuters) - Virtualization software maker VMware Inc reported its slowest revenue growth in seven quarters as IT spending remained sluggish and a stronger dollar reduced the value of overseas sales.
VMware's shares fell about 2 percent to $83.60 in extended trading on Tuesday.
The company's virtualization software enables the creation of a virtual machine that acts like a real computer with an operating system, helping users to store data more efficiently and cut IT costs.
"The bookings came up a bit shy of the Street and that is weighing on shares," FBR Capital Markets analyst Daniel Ives said.
"While Street expectations were not lofty heading into earnings, VMware continues to have challenges in its quest to show strong top-line growth given IT spending and competitive headwinds," Ives said.
Reuters had exclusively reported in February that its parent EMC Corp (NYSE:EMC) decided against spinning off its majority stake in VMware after reviewing the idea over several months following pressure from activist investor Elliott Management Corp.
Revenue from services for the quarter ended March 31 rose about 17 percent to $935 million (625.73 million pounds). Total revenue rose 11.1 percent to $1.51 billion.
Excluding the impact of currency, revenue rose 13 percent.
Net income fell slightly to $196 million, or 45 cents per share, from $199 million, or 46 cents per share.
Excluding items, the company earned 86 cents per share.
Analysts on average had expected profit of 84 cents on revenue of $1.5 billion, according to Thomson Reuters I/B/E/S.
Up to Tuesday's close, shares of the company had fallen about 18 percent in 2015.