VMware Revenues Up but Profits Drop 54%

By Chris Preimesberger  |  Posted 2009-10-21 Print this article Print

Hypervisor maker VMware reports fiscal third-quarter revenues of $490 million with a profit of $38 million, or 9 cents per share of common stock. This compares with a profit of $83 million or 21 cents per share on $472 million in sales in the same period a year ago, an abrupt 54 percent year-over-year drop in earnings.

Enterprise virtualization market leader VMware, like just about everybody else in IT, is still feeling the pinch of a slow-recovering world economy, but it appears to be holding its own in the face of a nagging buying slowdown.

The hypervisor maker, majority owned by storage giant EMC, reported on Oct. 21 fiscal third-quarter revenues of $490 million with a profit of $38 million, or 9 cents per share of common stock. This is compared with a profit of $83 million, or 21 cents a share, on $472 million in sales in the same period a year ago-an abrupt 54 percent year-over-year drop in earnings.

VMware beat some Wall Street forecasts in overall revenue but not in profit. Analysts surveyed by FactSet Research Systems, as reported by MarketWatch, had predicted VMware earnings of 20 cents per share on $473 million in revenue.

VMware shares improved slightly to $45.45 per share in after-hours trading on Oct. 21. Investors are obviously bullish on the company; a year ago, the stock was selling for $18.73.

Last quarter, VMware spent $362 million to acquire Java development tool maker SpringSource, which will help optimize development of enterprise data center middleware for cloud computing.

Company executives projected fourth-quarter revenue to jump substantially to between $540 million and $560 million. Analysts polled by Thomson Reuters, the Wall Street Journal reported, expect $523 million.

Looking further out, VMware said in its guidance that the first quarter 2010 would be "down sequentially," but did not provide specifics.

Chris Preimesberger Chris Preimesberger was named Editor-in-Chief of Features & Analysis at eWEEK in November 2011. Previously he served eWEEK as Senior Writer, covering a range of IT sectors that include data center systems, cloud computing, storage, virtualization, green IT, e-discovery and IT governance. His blog, Storage Station, is considered a go-to information source. Chris won a national Folio Award for magazine writing in November 2011 for a cover story on Salesforce.com and CEO-founder Marc Benioff, and he has served as a judge for the SIIA Codie Awards since 2005. In previous IT journalism, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. His diverse resume also includes: sportswriter for the Los Angeles Daily News, covering NCAA and NBA basketball, television critic for the Palo Alto Times Tribune, and Sports Information Director at Stanford University. He has served as a correspondent for The Associated Press, covering Stanford and NCAA tournament basketball, since 1983. He has covered a number of major events, including the 1984 Democratic National Convention, a Presidential press conference at the White House in 1993, the Emmy Awards (three times), two Rose Bowls, the Fiesta Bowl, several NCAA men's and women's basketball tournaments, a Formula One Grand Prix auto race, a heavyweight boxing championship bout (Ali vs. Spinks, 1978), and the 1985 Super Bowl. A 1975 graduate of Pepperdine University in Malibu, Calif., Chris has won more than a dozen regional and national awards for his work. He and his wife, Rebecca, have four children and reside in Redwood City, Calif.Follow on Twitter: editingwhiz

Submit a Comment

Loading Comments...
Manage your Newsletters: Login   Register My Newsletters

Rocket Fuel