The 10-second takeaway
For the quarter ended March 31 (Q1), VMware beat expectations on revenues and earnings per share.
Compared to the prior-year quarter, revenue improved significantly and GAAP earnings per share grew significantly.
Margins increased across the board.
VMware chalked up revenue of $1.06 billion. The 37 analysts polled by S&P Capital IQ hoped for sales of $1.03 billion on the same basis. GAAP reported sales were 25% higher than the prior-year quarter's $843.7 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
Non-GAAP EPS came in at $0.66. The 36 earnings estimates compiled by S&P Capital IQ predicted $0.60 per share on the same basis. GAAP EPS of $0.44 for Q1 were 52% higher than the prior-year quarter's $0.29 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 83.8%, 160 basis points better than the prior-year quarter. Operating margin was 20.6%, 240 basis points better than the prior-year quarter. Net margin was 18.1%, 320 basis points better than the prior-year quarter.
Next quarter's average estimate for revenue is $1.11 billion. On the bottom line, the average EPS estimate is $0.64.
Next year's average estimate for revenue is $4.56 billion. The average EPS estimate is $2.60.
The stock has a three-star rating (out of five) at Motley Fool CAPS, with 2,114 members out of 2,304 rating the stock outperform, and 190 members rating it underperform. Among 581 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 538 give VMware a green thumbs-up, and 43 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 $108.79.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. Motley Fool newsletter services have recommended buying shares of 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.