VMware Inc Beats Q1 Estimates, Looks Forward to Growth in the Mobile Cloud

Virtual-computing specialist VMware edged out analyst targets on both the top and bottom lines in the first quarter.

Anders Bylund
Anders Bylund
Apr 22, 2014 at 8:30PM
Technology and Telecom

Image source: VMware.

VMware (NYSE:VMW) just reported results for the first quarter of fiscal year 2014. Revenues increased 14% year over year, to $1.4 billion. Excluding sales for divested operations such as the Pivotal cloud computing platform, sales grew 18%. Non-GAAP earnings grew 9%, landing at $0.80 per share.

Analysts were looking for earnings of $0.79 per share on $1.35 billion in revenue, and VMware edged out both estimates.

Excluding Pivotal's results, all three of Vmware's reportable divisions saw sales growing between 16% and 17% year over year. Adjusted operating margins increased from 13.3% to 17.7%.

Unearned revenues in the software maintenance division jumped 21% higher from the year-ago period, and unearned professional services surged 36% higher. Unearned revenues reflect long-term contracts where much of the recorded cash sales will count toward revenues on an amortized, multi-year schedule.

"As the industry shifts from client server computing to the mobile-cloud era, customers are choosing our solutions because we have the most complete vision and offering for navigating this evolving world," said VMware CEO Pat Gelsinger in a prepared statement.

Coming into this report, VMware shares had gained 45% during the last 52 weeks. Share prices increased 0.8% in after-hours trading as investors reacted to the first-quarter report.