Next Tuesday, VMware (NYSE:VMW) will release its latest quarterly results. The key to making smart investment decisions on stocks reporting earnings is to anticipate how they'll do before they announce results, leaving you fully prepared to respond quickly to whatever inevitable surprises arise.

VMware has been a long-term growth giant in the red-hot virtual-computing industry. But last quarter, the company saw its growth slow down sharply, and that led investors to knock the stock from its nosebleed-level valuations. Let's take an early look at what's been happening with VMware over the past quarter and what we're likely to see in its report.

Stats on VMware

Analyst EPS Estimate


Change From Year-Ago EPS


Revenue Estimate

$1.18 billion

Change From Year-Ago Revenue


Earnings Beats in Past 4 Quarters


Source: Yahoo! Finance.

Can VMware regain investors' confidence this quarter?
Analysts have been somewhat negative on VMware's earnings prospects in recent months, reducing their estimates for the just-ended quarter by $0.04 per share but limiting their consensus reduction for full-year 2013 to $0.01. The stock has plunged, though, losing almost a quarter of its value since mid-January.

VMware has done an exceptional job of taking advantage of the move toward cloud computing and virtualization software, as its customers have turned to the company for help in optimizing data-center efficiency to make the most of the cloud and the data that it helps those customers collect. But as the industry has gotten more competitive, it's been increasingly difficult for VMware to produce the growth necessary to justify investors' high expectations of the company.

Moreover, competition has gotten tougher in the industry. Citrix Systems (NASDAQ:CTXS) has managed to sustain strong growth in product and license revenue in its most recent quarter and appears to be poised to start taking market share away from VMware. In addition, Red Hat (NYSE:RHT) has also achieved better license-revenue growth, suggesting that the problem may be solely with VMware rather than reflective of an industrywide trend.

Shares bounced somewhat last month when VMware said it and parent company EMC (NYSE:EMC) would spin off VMware's Cloud Foundry service and EMC's data analytics software business. The spinoff, to be called Pivotal, won't go public anytime soon, but it might help focus VMware on making the most of all of its various opportunities.

In VMware's report, pay close attention to whether the company can see renewed growth in its core sources of revenue. If the slowdown continues, then VMware could see another big shift down for its share price.

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Fool contributor Dan Caplinger has no position in any stocks mentioned. You can follow him on Twitter @DanCaplinger. The Motley Fool recommends VMware. The Motley Fool owns shares of EMC and VMware. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.