[t]VMW[/t] disappoints:
Full press release
VMware 1Q profit jumps but outlook disappoints
VMware 1st-quarter profit jumps but shares fall after-hours as revenue outlook disappoints
Wednesday April 22, 2009, 5:27 pm EDT
PALO ALTO, Calif. (AP) -- Virtualization software maker VMware Inc. said Wednesday its first-quarter profit grew as businesses continued to buy the company's platform in an effort to save money. But the company's revenue forecast disappointed investors, who sent shares tumbling nearly 12 percent in after-hours trading.
Virtualization technology helps companies save money on power and equipment by enabling a single computer to function like multiple machines.
VMware earned $69.9 million, or 18 cents per share, up 62 percent from profit of $43.1 million, or 11 cents per share, in the same period a year earlier. Excluding items such as the amortization of intangible assets, the company earned 25 cents per share in the latest quarter.
Revenue jumped 7 percent to $470.3 million from $438.2 million.
Analysts, on average, were expecting a profit of 20 cents per share on sales of $474.4 million, according to a poll by Thomson Reuters.
VMware said the quarter's service revenue grew 48 percent to $213.3 million. The company added that its business mix continues to shift, with service revenue becoming a larger proportion of total sales. License revenue fell 13 percent during the quarter to $257 million.
Paul Maritz, president and chief executive, called the quarter's results "solid" despite a very challenging economic climate. But the company said it expects second-quarter sales to be flat or even down when compared with the second quarter of 2008.
Last July, the company posted second-quarter sales of $456.2 million. This is well below the $499.7 million that analysts are expecting for the current quarter.
Shares fell $3.86, or 11.9 percent, to $28.69 in after-hours trading. The stock had closed the regular session up $2.33, or 7.7 percent, at $32.55.
Story link |
