Market Overview

VMware's Earnings: A Preview


VMware (NYSE: VMW) announces its next round of earnings this Tuesday, November 24. Here is Benzinga's everything-that-matters guide for this Tuesday's Q3 earnings announcement.

Net Income, Earnings, And Earnings Per Share

Earnings and especially earnings per share (EPS) are useful measures of a company's profitability. Total earnings, which is also referred to as net income, equals total revenue minus total expenses. EPS equals to net income divided by the number of shares outstanding.

Earnings And Revenue

VMware EPS is expected to be around $1.43, according to sell-side analysts. Sales will likely be near $2.81 billion. In the same quarter last year, VMware reported earnings per share of $1.49 on sales of $2.46 billion.

Why Analyst Estimates And Earnings Surprises Are Important

Wall Street analysts who study this company will publish analyst estimates of revenue and EPS. The averages of all analyst EPS and revenue estimates are called the "consensus estimates"; these consensus estimates can have a significant effect on a company's performance during an earnings release. When a company posts earnings or revenue above or below a consensus estimate, it has posted an "earnings surprise", which can really move a stock depending on the difference between actual and estimated values.

If the company were to post earnings in line with the consensus estimate when it reports Tuesday, EPS would be down 4.03%. Revenue would be up 14.41% on a year-over-year basis. Here is how the company's reported EPS has compared to analyst estimates in the past:

Quarter Q2 2020 Q1 2020 Q4 2020 Q3 2019
EPS Estimate 1.45 1.20 2.17 1.43
EPS Actual 1.81 1.52 2.05 1.49
Revenue Estimate 2.80 B 2.65 B 2.95 B 2.41 B
Revenue Actual 2.88 B 2.73 B 3.07 B 2.46 B

Stock Performance

Shares of VMware were trading at $147.95 as of November 20. Over the last 52-week period, shares are down 9.56%. Given that these returns are generally negative, long-term shareholders are likely a little upset going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. VMware is scheduled to hold the call at 16:30:00 ET and can be accessed here.


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Posted-In: Earnings