VMware Beats Street in Q1 Earnings, Ups Margin Projections

By Chris Preimesberger  |  Posted 2011-04-19 Print this article Print

The company reports that it picked up a large number of new customers in Q1, many of whom were buying VMware View for cloud computing controls.

VMware in its first-quarter earnings report April 19 outperformed Wall Street projections and then adjusted its guidance up for its margins this year.

Company executives told listeners on the quarterly conference call that VMware had picked up a large number of new customers in the first quarter, many of whom were buying VMware View for cloud computing controls.

The virtualization software maker reported that its net income climbed to $125.8 million (29 cents per share), up from $78.4 million (19 cents per share) in Q1 2009.

Excluding some one-time items, VMware came in with earnings of 48 cents per share, which beat Wall Street's average estimate of 42 cents, according to Thomson Reuters.

Revenue zoomed 33 percent to $844 million, which was well above analysts' average forecast of $815 million.

VMware said on the call that it had successfully closed a number of large enterprise licensing  agreements during the quarter, but did not say how many or name any of its new clients.

VMware has refigured its non-GAAP (generally accepted accounting principles) operating margin for 2011 to "expand slightly" from 2010, Chief Financial Officer Mark Peek said. In Q4 2010, Peek had said the company expected "little, if any, margin expansion in 2011."

The Palo Alto, Calif.-based virtualization software maker's stock was up 12.5 percent to $86 four hours after the market closed.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

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