Exhibit 11.1
                              Visual Networks, Inc.

                  Calculation of Income (Loss) Per Common Share
                                   (unaudited)
               (In thousands, except for share and per share data)
<TABLE>
<CAPTION>
<S>                                                         <C>               <C>                 <C>               <C>

                                                                 For the three months ended            For the nine months ended
                                                                        September 30,                         September 30,
                                                                        -------------                         -------------
                                                                     1998              1997               1998              1997
                                                             ----------------      ------------       -------------     ------------
Adjustments to net income (loss):
    Net income (loss)......................................         $  2,211         $  (1,167)         $  (4,994)        $  (5,603)
    Preferred dividend and accretion.......................                -              (365)              (144)           (1,094)
                                                                 ------------      ------------       ------------      ------------
       Net income (loss) applicable to common 
          shareholders.....................................         $  2,211         $  (1,532)         $  (5,138)        $  (6,697)
                                                                 ------------      ------------       ------------      ------------
Weighted average share calculation: 
   Basic weighted average shares outstanding:
      Average number of shares of common stock
      outstanding during the period........................       19,965,302         4,966,027         17,629,587         4,919,623
                                                                 ------------      ------------       ------------      ------------
      Diluted weighted average shares outstanding:
      Treasury stock effect of options (2).................        1,631,238                 -                  -                 -
      Conversion of preferred stock (1) (3)................                -                 -                  -                 -
                                                                 -----------      ------------       ------------      -------------
      Diluted weighted average shares outstanding..........       21,596,540         4,966,027         17,629,587         4,919,623
                                                                                                  
    Pro Forma diluted weighted average shares outstanding:     
        Conversion of preferred stock (1)..................                -        10,605,735          1,631,652        10,605,735
                                                                 -----------      ------------       ------------       ------------
       Pro forma diluted weighted average 
          shares outstanding...............................       21,596,540        15,571,762         19,261,239       15,525,358
                                                                =============     =============       =============     ============
Income (loss) per common share:
    Basic income (loss) per share (4)......................            $0.11           ($0.31)             ($0.29)          ($1.36)
                                                                =============     =============       =============     ============
    Diluted income (loss) per share (5)....................            $0.10           ($0.31)             ($0.29)          ($1.36)
                                                                =============     =============       =============     ============
    Pro forma income (loss) per share (6)..................            $0.10           ($0.07)             ($0.26)          ($0.36)
                                                                =============     =============       =============     ============
</TABLE>

(1) Series A  Convertible  Preferred  Stock and Series B, C, D and E  Redeemable
Convertible Preferred Stock were converted into 485,890 and 10,119,845 shares of
common stock, respectively,  concurrent with the Company's February 1998 initial
public offering.

(2) The treasury  stock effect of options to purchase  common stock has not been
included in the computation of diluted loss per share for the three months ended
September 30, 1997, the nine months ended  September 30, 1998 or the nine months
ended September 30, 1997 as such effect would be anti-dilutive.

(3) The  effect  of convertible   preferred stock  has  not been included in the
computation of diluted weighted average shares  outstanding for the three months
ended  September 30, 1997, the nine months ended  September 30, 1998 or the nine
months ended September 30, 1997 as such effect would be anti-dilutive.

(4) Basic income  (loss) per share is  calculated  by dividing net income (loss)
applicable  to  common   shareholders  by  the  basic  weighted  average  shares
outstanding.

(5) Diluted  income (loss) per share is calculated by dividing net income (loss)
applicable  to  common  shareholders  by the  diluted  weighted  average  shares
outstanding.

(6) Pro forma  diluted  income  (loss) per share is  calculated  by dividing net
income (loss) by the pro forma weighted average shares outstanding.