VMware Falls on Lower Q1 Profit

Cloud computing and leading virtualization company VMware VMW released its fiscal first-quarter earnings and sales results after the closing bell on Tuesday. Despite beating Wall Street estimates, the stock was last trading down better than 6 percent to $70.88 in the after-hours session after the company provided weak Q2 revenue guidance. VMware said that its first-quarter profit fell to $173.57 million or $0.40 per share, compared to $191.44 million or $0.44 per share, in the year ago period. On an adjusted basis, which is comparable to analysts' consensus, the company earned $319 million or $0.74 per share. This was above Wall Street consensus EPS estimates of $0.70 heading into the report. Sales for the period totaled $1.19 billion, a 13 percent gain over the $1.06 billion VMware reported in last year's first-quarter. This also beat analysts' consensus expectations of $1.18 billion by a narrow margin. Looking ahead to Q2, VMware guided for sales between $1.21 billion to $1.24 billion, which is below current consensus of $1.26 billion for fiscal Q2. Full-year revenue is expected to be between $5.12 billion and $5.24 billion, which compares to analysts' consensus sales estimates of $5.21 billion for the fiscal year.