VMware Inc (NYSE: VMW) has been a difficult stock to evaluate for many because it is basically a virtualization tracking stock since EMC Corp.(NYSE: EMC) still owns about 80% of the company. But that is not keeping the shares from flying higher after the earnings report this evening. The leader in virtualization reported earnings of $0.31 EPS while revenues rose 18% to about $608 million. Thomson Reuters had estimates of $0.26 EPS and $553.7 million in revenues.
VMware gave solid guidance for revenue of $580 million to $600 million in the current quarter and $2.45 billion to $2.55 billion for the full year. Thomson Reuters has estimates of $530.27 million in revenues for the current quarter and $1.97 billion in 2010.
The company is echoing what we have seen elsewhere on enterprise spending gains, as it said the results were on an improving global economy and that helped to boost the virtualization sales.
Shares closed up 1% at $42.00 versus a 52-week trading range of $19.16 to $47.60, but the real move is in the after-hours as shares are up 17.5% at $49.35. EMC is set to report earnings in the morning and its shares are up over 4% in the after-hours session at $17.66 versus a 52-week trading range of $9.61 to $18.44.
EMC is expected to post $0.30 EPS and $4.03 billion in revenues. Our take is that the bar just got moved up for EMC and what the trading and investing community expects to see from the storage leader.
A rival in virtualization has been Citrix Systems, Inc. (NASDAQ: CTXS) for its Xen applications, although some consider it a distant rival at best. Its shares are also up 2.5% at $42.20 in the after-hours session after closing down 0.6% at $41.15. The 52-week trading range is $20.00 to $44.01.
JON C. OGG
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