VMware earnings: Strong second quarter, ups outlook amid strong demand

VMware reported strong second quarter results and raised its revenue outlook as customers continue to use virtualization software to upgrade data centers.

The company on Tuesday reported net income of $75 million, or 18 cents a share, in the second quarter (statement). Non-GAAP earnings were 34 cents a share. Revenue was $674 million, up 48 percent from a year ago. Wall Street was looking for earnings of 32 cents a share on revenue of $656.9 million.

Meanwhile, VMware raised its outlook for 2010 as the company continues to ride an enterprise upgrade cycle. The company said third quarter revenue will be flat with the current quarter and in the range of $680 million and $705 million. Wall Street was looking for revenue of $672 million in the third quarter. For 2010, VMware projected revenue of $2.72 billion and $2.8 billion, ahead of Wall Street estimates of $2.7 billion.

Overall, VMware had a strong quarter where demand was strong across all products and regions. License revenue in the second quarter was $323.6 million, up from $227.9 million a year ago. Services revenue was $350 million, up from $227.7 million a year ago.

VMware's quarter indicates that its parent, storage giant EMC, will also deliver a strong second quarter. EMC reports earnings Wednesday.