VMware: Better-than-expected second quarter

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

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

The outlook was also solid relative to expectations. VMware projected third quarter revenue to be between US$465 million and US$480 million. Wall Street was expecting third quarter sales of US$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”.

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