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VMware (VMW) to Report Q1 Earnings: What's in the Cards?

VMware VMW is slated to release first-quarter fiscal 2021 results on May 28.

Notably, on Mar 26, VMware announced the withdrawal of its first-quarter and fiscal 2021 guidance provided on Feb 27. The company cited uncertainty from the impact of the coronavirus spread on its business operations behind the outlook suspension.

The Zacks Consensus Estimate for quarterly earnings has been steady over the past 30 days at $1.19 per share, suggesting a decline of 9.9% from the year-ago period’s reported figure.

Further, the Zacks Consensus Estimate for revenues is pegged at $2.65 billion, indicating a 16.9% rise from the year-ago reported number.

The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters, missing the same in one, the average positive surprise being 1.8%.

VMware, Inc. Price and EPS Surprise

VMware, Inc. price-eps-surprise | VMware, Inc. Quote


Let’s see how things shaped up prior to this announcement.

Key Factors to Note

VMware’s first-quarter fiscal 2021 results are expected to bear the brunt of declining IT spending and a sluggish demand environment due to the coronavirus outbreak.

Bookings growth is likely to have been hurt by the worsening macroeconomic woes in North America. Notably, the U.S. accounted for more than 50% of this Zacks Rank #4 (Sell) company’s fourth-quarter fiscal 2020 revenues.

Nevertheless, VMware’s strong product portfolio is likely to have driven the company’s top line in the to-be-reported quarter. Additionally, frequent product launches and feature updates are likely to have attracted clients during the fiscal first quarter.

Notably, VMware announced the general availability of vSphere 7 in the to-be-reported quarter. The solution is redesigned on an open platform using Kubernetes APIs to provide a cloud-like experience for developers and operators.

Further, VMware Tanzu Portfolio enables enterprises to adopt cloud-native technologies and automate the modern application lifecycle on any cloud.

Moreover, the company’s strategy to build strong partnerships with the likes of International Business Machines IBM, Amazon’s AMZN cloud computing arm AWS and Microsoft MSFT is helping it expand customer base in the cloud space.

Notably, VMware Cloud on AWS is now available across 17 AWS regions, globally. Solid demand for this solution is expected to have aided the company’s top line in the fiscal first quarter.

Furthermore, acquisitions of Pivotal Software and Carbon Black are expected to have been instrumental in driving VMware’s revenues during the period under consideration.

You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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