The 10-second takeaway
For the quarter ended March 31 (Q1), VMware met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew. Non-GAAP earnings per share grew. GAAP earnings per share contracted.
Gross margins expanded, operating margins contracted, net margins dropped.
VMware chalked up revenue of $1.19 billion. The 39 analysts polled by S&P Capital IQ foresaw net sales of $1.19 billion on the same basis. GAAP reported sales were 13% higher than the prior-year quarter's $1.06 billion.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.74. The 41 earnings estimates compiled by S&P Capital IQ anticipated $0.70 per share. Non-GAAP EPS of $0.74 for Q1 were 12% higher than the prior-year quarter's $0.66 per share. GAAP EPS of $0.40 for Q1 were 9.1% lower than the prior-year quarter's $0.44 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 84.7%, 90 basis points better than the prior-year quarter. Operating margin was 18.7%, 190 basis points worse than the prior-year quarter. Net margin was 14.6%, 350 basis points worse than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.26 billion. On the bottom line, the average EPS estimate is $0.77.
Next year's average estimate for revenue is $5.22 billion. The average EPS estimate is $3.22.
The stock has a four-star rating (out of five) at Motley Fool CAPS, with 2,183 members out of 2,364 rating the stock outperform, and 181 members rating it underperform. Among 477 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 438 give VMware a green thumbs-up, and 39 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 $98.27.
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