The 10-second takeaway
For the quarter ended Dec. 31 (Q4), VMware beat slightly on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue improved significantly, and earnings per share increased significantly.
Margins increased across the board.
VMware reported revenue of $1.1 billion. The 35 analysts polled by S&P Capital IQ anticipated revenue of $1 billion. Sales were 27% higher than the prior-year quarter's $836 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions.
Non-GAAP EPS came in at $0.62. The 38 earnings estimates compiled by S&P Capital IQ averaged $0.60 per share on the same basis. GAAP EPS of $0.46 for Q4 were 65% higher than the prior-year quarter's $0.28 per share.
Source: S&P Capital IQ. Quarterly periods. Figures may be non-GAAP to maintain comparability with estimates.
For the quarter, gross margin was 84.3%, 120 basis points better than the prior-year quarter. Operating margin was 20.2%, 500 basis points better than the prior-year quarter. Net margin was 18.9%, 460 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1 billion. On the bottom line, the average EPS estimate is $0.56.
Next year's average estimate for revenue is $4.5 billion. The average EPS estimate is $2.51.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 2,079 members out of 2,261 rating the stock outperform, and 183 members rating it underperform. Among 561 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 516 give VMware a green thumbs-up, and 45 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on VMware is outperform, with an average price target of $106.23.
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