VMware Crushed After Q4 Report
Despite releasing quarterly earnings and revenue results which were above Wall Street consensus estimates, VMware (NYSE: VMW) was trading sharply lower in Monday's after-hours session. Shares of the virtualization and cloud computing company were down around 13 percent to $85.53.
Palo Alto, California-based VMware reported fourth-quarter net income of $205.8 million or $0.47 per share, compared to $200.4 million or $0.46 per share, in last year's corresponding quarter.
On an adjusted basis, which is comparable to analysts' consensus, the company reported net income of $349.3 million or $0.81 per share, up from $286.3 million or $0.62 per share, last year. This beat analysts' consensus EPS estimates of $0.78 by three cents.
Revenues for the period were also strongly higher. Sales at VMware grew 22 percent to $1.29 billion from $1.06 billion last year. This came in slightly ahead of consensus Street estimates of $1.28 billion.
Although VMware exceeded both earnings and revenue estimates, investors were clearly looking for more growth from the richly-valued company. The stock traded at a trailing P/E of 57.50 and a forward P/E above 30 prior to the after-hours decline. In light of VMW's premium valuation and growth stock status, Wall Street was looking for quarterly numbers that were significantly above consensus.
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