Earnings Preview for VMware

On Thursday, May 27, VMware VMW will release its latest earnings report. Benzinga's outlook for VMware is included in the following report.

Net Income, Earnings, And Earnings Per Share

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

Wall Street analysts see VMware reporting earnings of $1.76 per share on revenue of $2.99 billion. In the same quarter last year, VMware reported EPS of $1.52 on revenue of $2.73 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to match the consensus estimate when it reports Thursday, EPS would be up 15.79%. Sales would be up 9.36% on a year-over-year basis. In comparison to analyst estimates in the past, here is how the company's reported EPS stacks up:

Stock Performance

Shares of VMware were trading at $161.12 as of May 25. Over the last 52-week period, shares are up 13.29%. Given that these returns are generally positive, long-term shareholders are probably satisfied going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. VMware is scheduled to hold the call at 16:30:00 ET and can be accessed here.