VMware Profit Shoots Up 25 Percent in Q1 Report

By Chris Preimesberger  |  Posted 2012-04-18 Print this article Print

Strong demand for cloud system-related software drives total income for Q1 2012 to $1.06 billion, an increase of 52 percent from the first quarter of 2011.

Virtualization king VMware, long one of the most successful software companies on the planet, reported another banner financial quarter April 18, adding 52 percent more income and 25 percent more profit year over year based on strong license revenue and services.

Total income for Q1 2012 was $1.06 billion, an increase of 52 percent from the first quarter of 2011. Net income was $191 million (44 cents per diluted share), up 25.1 percent over $126 million from a year ago.

Operating income for the first quarter was $217 million, an increase of 41 percent from the first quarter 2011. License revenue rose 15 percent to $481.9 million.

Strong demand for cloud system-related software -- especially for private clouds -- and good repeat licensing business are driving the increase in sales, COO Mark Peek told analysts on a conference call.

"We continue to invest first and foremost in products for the back end or the data center," Chief Executive Paul Maritz said on the call. "We are anticipating further significant enhancements in all three major areas during the course of the year."

International revenue made up 54 percent of total revenue for the period, the highest level for any quarter reported by the Palo Alto, Calif.-based company.

The stock price rose 2.8 percent to $114.38 in extended trading after the report. Earlier, the stock added 0.7 percent to $111.29 at the close. The shares have risen 34 percent in value this year, Peek said.

For the full year, VMware said sales will be $4.53 billion to $4.63 billion, in line with analysts€™ estimates of $4.56 billion. Operating margin for the year will be 30.25 percent to 31.25 percent of sales. 

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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