Please ensure Javascript is enabled for purposes of website accessibility

VMware Beats Analyst Estimates on EPS

By Seth Jayson - Updated Apr 7, 2017 at 12:12PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

Just the facts, Fool.

VMware (NYSE: VMW) reported earnings on Oct. 23. Here are the numbers you need to know.

The 10-second takeaway
For the quarter ended Sep. 30 (Q3), VMware met expectations on revenues and beat expectations on earnings per share.

Compared to the prior-year quarter, revenue grew significantly and GAAP earnings per share shrank.

Gross margins expanded, operating margins shrank, net margins dropped.

Revenue details
VMware reported revenue of $1.13 billion. The 36 analysts polled by S&P Capital IQ looked for a top line of $1.13 billion on the same basis. GAAP reported sales were 20% higher than the prior-year quarter's $941.9 million.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
EPS came in at $0.70. The 38 earnings estimates compiled by S&P Capital IQ forecast $0.63 per share. GAAP EPS of $0.36 for Q3 were 12% lower than the prior-year quarter's $0.41 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
For the quarter, gross margin was 84.2%, 40 basis points better than the prior-year quarter. Operating margin was 16.8%, 240 basis points worse than the prior-year quarter. Net margin was 13.8%, 500 basis points worse than the prior-year quarter.

Looking ahead
Next quarter's average estimate for revenue is $1.28 billion. On the bottom line, the average EPS estimate is $0.73.

Next year's average estimate for revenue is $4.59 billion. The average EPS estimate is $2.70.

Investor sentiment
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,135 members out of 2,315 rating the stock outperform, and 180 members rating it underperform. Among 506 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 466 give VMware a green thumbs-up, and 40 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 $111.53.

Software and computerized services are being consumed in radically different ways, on new and increasingly mobile devices. Many old leaders will be left behind. Whether or not VMware makes the coming cut, you should check out the company that Motley Fool analysts expect to lead the pack in "The Next Trillion-dollar Revolution." Click here for instant access to this free report.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

VMware, Inc. Stock Quote
VMware, Inc.
VMW
$116.03 (-2.85%) $-3.40

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
334%
 
S&P 500 Returns
117%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/24/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.