VMware's second quarter strong, sees upside ahead

VMware reported second quarter earnings of $220 million, or 51 cents a share, on revenue of $921 million, up 37 percent from a year ago. Non-GAAP earnings were 55 cents a share.

Wall Street was looking for earnings of 47 cents a share on revenue of $873 million.

The company's second quarter sales were almost evenly split between U.S. ($450 million) and international revenue ($471 million).

In a statement, VMware CEO Paul Maritz said the company's results indicate "the continued adoption of virtualization."

As for the outlook, VMware projected a strong third quarter. The company projected third quarter revenue between $915 million to $940 million compared to estimates of $898 million. The company did say that non-GAAP operating margins would fall in the third quarter relative to the second.

For 2011, VMware projected that sales will be between $3.65 billion and $3.75 billion. Wall Street was looking for $3.68 billion.