VMWare Earnings: Higher-Than-Expected Net Income

VMWare (VMW) topped analyst expectations for the most recent quarter. To figure out why, let's first dig into the numbers. Then we can look a bit deeper and see what action you can take.

The Big Numbers:
Investors cheered VMWare's latest numbers as the company reported EPS and revenues that topped predictions. The company reported EPS of 51 cents/share versus the 31 cents/share estimate and revenues of $921 million versus the $873 million estimate. EPS rose 183.3% while revenue climbed 36.7% from the same period last year. The company has now seen three quarters in a row of rising net income. 

Income:
For the year, VMWare reported net income of $1.22 per share. The company trumped analyst projections of $1.02 by 19.6%. According to the reported number, the company's income rose 195.2% from last year's levels.

Conference Call:
The conference call for second quarter earnings can be accessed here.

Official Comment:
"VMware's second quarter results were driven by strength across geographies and record enterprise license agreement bookings as a percentage of total bookings," said Mark Peek, chief financial officer."Third quarter 2011 revenues are expected to be in the range of $915 and $940 million, a year-over-year increase of 28% to 32%. The third quarter non-GAAP operating margin is expected to decline sequentially by 260 to 360 basis points. For the year, we expect annual revenues to be in the range of $3.65 billion and $3.75 billion, an increase of 28% to 31% compared to 2010."

Industry:
With price/earnings growth of 3.6%, VMWare's industry, computer software, is expanding. The company's EPS lags behind the industry average by 95.7%.

What to Do Next:
Now that you've gotten a round up of VMWare's latest numbers, you can make a better-informed decision about whether to buy, sell or hold those shares. Whatever you do, be sure to visit us before the company's next earnings release for a full preview.

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