|VMware CEO Paul Maritz says that the company saw a fourth-quarter spending uptick.|
VMware's updated share price, guidance and operating margin comment have been added to this story. PALO ALTO, Calif. ( TheStreet) -- VMware ( VMW) blew past Wall Street's fourth-quarter estimates after market close on Monday as the software maker provided yet more evidence of the enterprise IT spending refresh. Hot on the heels of strong numbers from IBM ( IBM) and Intel ( INTC), VMware reported earnings of 46 cents a share on revenue of $836 million for the three months ended Dec. 31, up from a profit of 31 cents a share on revenue of $608 million in the same period last year. Analysts surveyed by Thomson Reuters had predicted earnings of 44 cents a share and revenue of $803.6 million.
"VMware clearly benefited in the fourth quarter from both an uptick in spending and the momentum of virtualization as the central technology for modernizing infrastructures," said Paul Maritz, the VMware CEO, in a statement. VMware, which is a majority-owned unit of EMC ( EMC), is enjoying growth both within the United States and overseas. The company's 2010 U.S. revenue grew 40% compared to the prior year to reach $1.5 billion. International sales climbed 43% during the same period to reach $1.4 billion. The company, however, says that its operating margin will remain flat in 2011. "As we continue to invest to take advantage of the generational shift underway in IT, we do not anticipate expansion of operating margins in 2011," explained VMware CFO Mark Peek, in the company's statement. Investors reacted negatively to the CFO's margin comment, and the firm's stock tumbled $4.10, or 4.67%, to $83.63 in extended trading. Peek nonetheless offered healthy first-quarter guidance, projecting revenue between $800 million and $820 million, well above the $784.31 million forecast by analysts. Virtualization, which lets users make virtual versions of their hardware and software, has been one of the key technology trends of recent years, as companies look to consolidate their data centers and reduce IT gear. VMware rivals Citrix Systems ( CTXS) and Microsoft ( MSFT) report their fourth-quarter and second-quarter results, respectively, after market close on Wednesday and Thursday. --Written by James Rogers in New York. >To follow the writer on Twitter, go to http://twitter.com/jamesjrogers. >To submit a news tip, send an email to: firstname.lastname@example.org.