VMware Q4 Earnings Up, but Stock Slips 14 Percent
This stock dip was all about VMware's forecast for the current period, which came in way below analysts' forecasts.Apple, Google and now VMware -- three of the most successful and profitable companies of any market in the world -- have something new in common: Even as they continue to rake in record revenue and profits, Wall Street punishes them where it hurts -- in the stock price, and thus, their capital value. A week after Google and Apple posted record financial numbers and then watched their stocks slide, VMware on Jan. 28 did the same, showing a double-digit gain in earnings for Q4 2012 while watching the stock tumble 14 percent after the closing bell. This stock dip was all about VMware's forecast for the current period, which came in below analysts' forecasts. At 3:30 p.m. Pacific time Jan. 28, VMware common stock was selling at $83.89, down 14.7 percent from the closing-bell price of $98.32. In its fiscal Q4, which ended Dec. 31, VMware reported net revenue of $206 million (47 cents per stock share) compared to net income of $200 million (46 cents per share) for the same period in 2011.
Fourth-quarter revenue grew 22 percent to $1.29 billion. Analysts were expecting earnings of 78 cents a share on revenue of $1.28 billion, which was on target. But the company projected revenue for Q1 2013 to come in between $1.17 billion and $1.19 billion, substantially below analysts' projection of $1.25 billion.