VMware's Q4: $1.29 billion in revenue, beats estimates, cloudy outlook

Summary:The cloud-infrastructure company rode a strong fourth quarter into record earnings, but its 2013 outlook has come up short of analyst forecasts. Here's a look.

Virtualization leader VMware released its fourth-quarter fiscal results a moment ago, and it's a solid quarter that beats Wall Street estimates.

(Credit: VMware)

The Palo Alto, California-based company recorded $1.29 billion in fourth-quarter revenue--an increase of 22 percent from the same quarter a year ago--and non-GAAP earnings per share of $0.81. Investors were looking for non-GAAP earnings of 78 cents per share on revenue of $1.28 billion.

The company raked in non-GAAP profits of $349 million for the quarter, about $0.81 per share. That's up from $266 million ($0.62 per share) for the same quarter a year ago. (The GAAP numbers for Q4 are as follows: $206 million, $0.47 EPS; up from $200 million, $0.46 EPS in 4Q11).

With the year behind it, the cloud-infrastructure company managed an annual operating margin of 18.9 percent (non-GAAP, 32.4 percent). Operating margin for the quarter was 19.5 percent (non-GAAP, 32.8 percent).

VMware ended the year with $4.63 billion in cash on hand.

All in all, VMware raked in $4.61 billion in 2012, an increase of 22 percent over the previous year. Its annual US revenues grew 22 percent, to $2.23 billion, in 2012. Its annual international revenues also grew by 22 percent, to $2.38 billion.

The company made $2.09 billion in license revenues in 2012, a 13 percent increase over last year, and $2.52 billion in service revenues, an increase of 31 percent over 2011.

As for 2013, the Q1 outlook is revenues of $1.17 billion to $1.19 billion, an increase of 11 percent to 13 percent over 1Q12. Still, that's short of investor expectations, which seek earnings of 75 cents per share (non-GAAP) on revenue of $1.25 billion.

As such, the company's shares took a considerable hit in after-hours trading, down more than 10 percent from market close.

(Credit: VMware)

VMware estimated that it will pull in between $5.23 billion and $5.35 billion in revenue for the year, an increase of 14 to 16 percent over 2012. It also cited an 8 percent to 11 percent predicted increase in annual license revenues.

(Credit: VMware)

Topics: VMWare


Andrew Nusca is a former writer-editor for ZDNet and contributor to CNET. He is also the former editor of SmartPlanet, ZDNet's sister site about innovation. He writes about business, technology and design now but used to cover finance, fashion and culture. He was an intern at Money, Men's Vogue, Popular Mechanics and the New York Daily Ne... Full Bio

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