VMware: 'Somewhat better visibility' ahead

VMware delivered a better-than-expected second quarter and outlook for the three months ahead.

The virtualization software company reported second quarter earnings of $33 million, or 8 cents a share, down from $52 million, or 13 cents a share a year ago. The company reported non-GAAP earnings of $96 million, or 20 cents a share, on revenue of $456 million, flat from a year ago. Wall Street was expecting earnings of 19 cents a share on revenue of $452.1 million.

The outlook was also solid relative to expectations. VMware projected third quarter revenue to be between $465 million and $480 million. Wall Street was expecting third quarter sales of $471.1 million. Revenue for 2009 will be up 1 percent to 3 percent.

In a statement, CFO Mark Peek said the company is still cautious about the economy "we are beginning to get somewhat better visibility into our business."

By the numbers:

• U.S. revenue in the second quarter fell 3 percent compared to a year ago to $234 million. International revenue was up 3 percent in the quarter to $222 million.
• Service revenue was up 32 percent from a year ago, but license revenue fell 20 percent.
• The company ended the quarter with $2.3 billion in cash and equivalents.