VMware Delivers on Earnings (VMW, EMC)

Virtualization leader VMware, Inc. (NYSE: VMW) has managed to deliver on earnings after the close today.  Non-GAAP operating income was up 94% to $187 million and earnings were reported as $0.34 EPS on a non-GAAP basis (versus $0.20 a year ago); Revenues were up 48% to $674 million.  Thomson Reuters had estimates of $0.32 EPS and $656.4 million in revenue.

As far as guidance, it sees license revenues to be flat sequentially and total revenues to increase to a range of $680 and $705 million. For our 2010 annual revenues, the guidance was raised to a 35% to 38% growth range of $2.725 and $2.8 billion.  Thomson Reuters has estimates of $671.9 million for the next quarter and has estimates for 2010 at $ 2.71 billion.

VMware’s cash and equivalents came in up 21% from a year ago at $2.8 billion, while its total deferred revenues were up 58% at $1.5 billion.  U.S. revenues were up 43% to $334 million and international revenues grew 53% to $340 million. License revenues were up 42% at $324 million; Services revenues were up 54% at $350 million.

Shares closed down 1.25% at $72,42 and the 52-week range is $30.00 to $74.86.  The after-hours response has shares up 5.1% at $76.10 on active trading.

Due to the strong ties with former parent (and majority shareholder) EMC Corp. (NYSE: EMC), this has expectations higher for its earnings due tomorrow morning.  EMC closed down 1.1% at $20.24 and the stock is up 1.5% at $20.55 in the after-hours session versus a 52-week range of $13.73 to $20.65.

JON C. OGG