VMware Inc. (NYSE:VMW), a provider of virtualization and cloud infrastructure solutions, reported its financial results for the second quarter of fiscal 2018 on Aug. 24.
VMware closed the second quarter reporting a non-GAAP diluted EPS of $1.19. This figure represents a 22.7% increase from 97 cents reported in the year-ago quarter, and the company beat analysts’ expectations on earnings by 4 cents with a positive surprise of 3.50%.
Source: Yahoo Finance
Second quarter of fiscal 2018 earnings are backed on revenue that came in at $1.9 billion, which is a 12.4% upside year over year and is composed by license for $732 million (up 14% year over year) and services for $1.17 billion (up 11% year over year). The company beat expectations on revenue by $20 million.
Due “to strong performance in the second quarter of fiscal 2018 and continued broad-based strength across its product portfolio expected in the second half of fiscal 2018,” as reported by the company, full fiscal 2018 expectations have been increased to $7.83 billion for revenue, to 32.7% for the operating margin and to $5.06 for EPS.
Analysts forecast the company will close full fiscal 2018 reporting revenue coming in at $7.72 billion and an EPS of $5.01.
VMware closed the second quarter of fiscal 2018 with the most prominent figures of the balance sheet: Approximately $8.9 billion is the amount in cash and securities, and $5.5 billion is unearned revenue.
The company completed a $4 billion valued debt offering on Aug. 21, which is composed by senior unsecured notes with maturity in three, five and 10 years. The board of directors approved a $1 billion valued stock repurchasing program which is valid until the next calendar year. VMware also has $900 million of its own shares left from a $1.2 billion valued stock repurchase program that is valid until the next calendar year.
From its operations VMware has generated a cash flow of $620 million during the second quarter of fiscal 2018 while the free cash flow amounted to $563 million.
GuruFocus gives VMware a financial strength rating of 7 out of 10 and a profitability and growth rating of 8 out of 10.
VMware is trading around $102.74 per share with a market capitalization of $42.09 billion. The price-book (P/B) ratio is 4.88, the price-sales (P/S) ratio is 5.76, the price-earnings (P/E) ratio is 32.62, the forward P/E ratio is 18.82 and the EV/EBITDA ratio is 17.66.
Disclosure: I have no positions in VMware.
