VMware posts 1st-quarter earnings above Wall Street estimates as services revenue jumps

VMware’s 1Q results top Wall street estimates

PALO ALTO, Calif. — VMware Inc. posted a 12 percent increase in first-quarter net income Tuesday as the software maker recorded a big jump in services revenue.

The company earned $78.4 million, or 19 cents per share, in the three months ended in March. That’s up from $69.9 million, or 18 cents per share, in the same quarter last year.

Excluding unusual items, the company said it would have earned 32 cents per share in the latest quarter.

Revenue climbed by more than a third to $633.5 million from $470.3 million. Software licensing revenue jumped 21 percent, while services revenue was up 51 percent.

The results topped Wall Street forecasts. Analysts surveyed by Thomson Reuters, who typically exclude one-time charges, expected earnings of 28 cents per share on revenue of $592.5 million.

VMware’s virtualization software allows one computer to function as several, helping businesses cut costs by saving on energy and equipment.

VMware said its results benefited from pent-up demand carried over from the previous quarter, as well as a growing business in overseas markets such as Europe, Japan and China. International revenue rose 40 percent, compared with a 30 percent increase in the U.S.

VMware predicted second-quarter revenue of between $635 million and $665 million, better than analysts’ average projection of $607.7 million.

The company also projected full-year revenue of $2.63 billion and $2.73 billion. Analysts predict revenue of $2.53 billion.

VMware shares rose 68 cents to $57.20 in extended trading. They earlier added 96 cents to end regular trading at $56.52.