VMware's first quarter better than expected

VMware's first quarter results topped expectations as the company managed to weather the economic downturn well. 

The company reported net income of $69.9 million, or 18 cents a share, on revenue of $470.3 million, up 7 percent from a year ago. Non-GAAP earnings were $99.7 million, or 25 cents a share, up from $88.5 million, or 22 cents a share a year ago. Wall Street was expecting earnings of 20 cents a share on revenue of $474 million, according to Thomson Reuters. 

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By the numbers:

• U.S. revenue was up 8 percent in the first quarter to $244.1 million. International revenue was up 6 percent to $226.2 million. 
• Services revenue has become a bigger part of VMware's pie. Service revenue was up 48 percent for the quarter, but license revenue fell 13 percent. 
• Deferred revenue was up 5 percent to $917.2 million as of March 31.
• VMware ended the quarter with $2 billion in cash. 

In a statement, VMware CEO Paul Maritz said the company delivered solid results in a "challenging economic climate." He added:

In an environment where customers are reducing IT purchases in order to preserve cash, we successfully managed costs while continuing to make strategic investments in our products.