VMware Inc (VMW) announced strong earnings and revenue for the first quarter, sending its shares up more than 6 percent on Friday. The results mark the fifth consecutive quarter of better-than-expected results amid solid demand for its software products.
The Palo Alto, California-based company reported net income of $942 million, or $2.29 a share for the three-month period ended May 4, representing a surge of more than four-fold from $245 million, or 59 cents a share in the comparable quarter last year. The profit was mainly driven by a one-time gain of $781 million from initial public offering (IPO) of Pivotal Software.
On an adjusted basis, the company earned $1.26 a share, beating consensus forecast of $1.14 a share.
Revenue for the quarter came in at $2.01 billion, up 13.8 percent from the same period last year. Analysts on average were looking for $1.96 billion in revenue.
VMware’s Chief Executive Officer Pat Gelsinger said first-quarter was a solid start to the year, and the company is pleased with its results, which continue to be helped by broad-based strength across its diverse product and services range.
Separately, Chief Financial Officer Zane Rowe said the results for the latest quarter show the success VMware has with its broad and increasingly integrated product portfolio. Rowe added the company is well positioned to execute its strategy following strong start to the current fiscal year.
Sales from licensing business climbed 20.7 percent to $774 million in the latest quarter, handily beating consensus forecast of $727.3 million.
Comparatively, its services revenue jumped 9.8 percent to $1.23 billion and matched analysts’ average forecast.
VMware shares jumped 6.18 percent to $145.93 in the previous trading session following better-than-expected quarterly results.