3 Key Takeaways From VMware's Third Quarter
VMware (NYSE: VMW) reported third-quarter earnings after the market closed on Tuesday, and the virtual-machine software specialist delivered sales and earnings results that came in significantly ahead of the market's expectations -- at first glance. Revenue for the period rose roughly 12% year over year to come in at $2.46 billion, ahead of the average analyst sales target of $2.41 billion. Non-GAAP (adjusted) earnings per diluted share came in at $1.49, which was down roughly 4.5% year over year but topped the average analyst estimate's call for $1.43.
Analysts including those at KeyBanc raised their targets on the stock from $175 to $182, and an analyst at Citi raised its price target from $183 to $198.
VMware stock posted gains shortly following the release and analyst price hikes. But these gains quickly reversed, and the stock closed down about 2.4% in the day of trading on Wednesday following the release. The market appears to have realized that the analyst targets that VMware beat were only for the core business -- and had not factored in the contribution from the company's Carbon Black acquisition. Investors may have also reassessed the company's guidance.
Source Fool.com
