VMware Pops on Earnings Beat (Update 1)
This story has been updated with additional information on VMware's guidance.
NEW YORK (TheStreet) -- VMware
"VMware continues to build momentum globally, because we are uniquely positioned to help our customers transform to the mobile-cloud era of computing," CEO Pat Gelsinger explained in a statement. "Customers are making long-term commitments to VMware to help them liberate resources from their current environments and power their businesses into the future."
"We are very pleased with our third quarter performance, meeting or exceeding all of our key goals for the quarter," added Jonathan Chadwick, VMware's CFO.
The company said its net income for the third quarter accelerated by about 67% to $261 million as adjusted earnings increased 20% year over year to 84 cents a share on a 14% rise in revenue to $1.29 billion. The earnings results exceeded the Wall Street target of 82 cents a share on revenue of $1.29 billion, according to a Thomson Reuters poll of analysts.
VMware said during its earnings call that it expects fourth-quarter revenue in the range of $1.45 billion to $1.48 billion and full year sales between $5.175 billion and $5.205 billion. License sales are expected to be between $670 million and $690 million in the fourth quarter and between $2.255 billion and $2.275 billion for fiscal 2013. Analysts polled by Thomson Reuters expect fourth-quarter revenue of $1.478 billion and full-year revenue of about $5.2 billion.
The Palo Alto, Calif.-based firm said that the fourth quarter is typically its seasonally strongest quarter and it's expecting strength in its Enterprise License Agreement (ELA) business, which could drive a 40% rise in bookings in this 2010 to 2013 renewal cycle. Although the overall "dollar opportunity" of ELAs may not go up as fast as it did in previous years, the company's still expecting strength going into the back half of 2013.
The company said it expects to bounce back in the area of end user bookings during the fourth quarter, a key strategic leg in its overall strategy, driven by a very strong worldwide pipeline.
-- Written by Andrea Tse in New York
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