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Why VMware Shares Skyrocketed

Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.

What: Shares of virtualization specialist VMware (NYSE: VMW  ) have skyrocketed today by as much as 18% after the company reported earnings last night.

So what: Revenue in the second quarter totaled $1.24 billion, which translated into adjusted earnings per share of $0.79. Both figures topped the market's expectations of $1.23 billion in sales and $0.77 per share in adjusted profit. Investors were impressed with VMware's guidance.

Now what: Third-quarter sales are expected to be in the range of $1.27 billion to $1.3 billion, and license revenues should be $535 million to $555 million. Full-year revenue should be $5.12 billion to $5.26 billion. That outlook helped dispel fears that VMware's business was maturing and growth was slowing, as pessimism had been growing recently. Nomura Securities and Raymond James both upgraded VMware to "buy."

Interested in more info on VMware? Add it to your watchlist by clicking here.

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Related Tickers

9/26/2016 4:04 PM
VMW $73.44 Up +0.06 +0.08%
VMware CAPS Rating: ***