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    VMware Beats Street Forecasts in Q4 Earnings Report

    By
    Chris Preimesberger
    -
    January 25, 2010
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      Virtualization software maker VMware on Jan. 25 dazzled Wall Street with its quarterly results and cautiously predicted that its sales and licensing income growth could more than double in 2010 over the previous year-if the economy continues to improve.
      Revenue for the company increased 18 percent to $608 million, substantially above the average analyst forecast of $554 million. The report, delivered an hour after the closing bell, increased share prices by 18.6 percent late in the day, from the closing price of $42 to $49.60 after hours on the NASDAQ listing.
      VMware also reported profit of 31 cents per share, which beat the average analyst forecast of 26 cents.
      It wasn’t a perfect report; the company’s net income fell to $56.4 million, or 14 cents per share, from $111.5 million, or 29 cents, a year earlier, thanks to higher operating expenses, VMware Chief Financial Officer Mark Peek said. The company added about 400 new employees in the quarter, Peek said.
      However, Peek also said he believes VMware’s revenue could climb from 21 to 26 percent this year after growing just 8 percent in 2009.
      The virtualization trends of the past decade are continuing, VMware CEO Paul Maritz said, leaving the company with a “great opportunity.”
      Maritz said the improving economy has boosted VMware’s-and other companies’-software sales, especially given overdue demand from customers that wanted to update their data centers but lacked the capital to buy new software and hardware in 2009.
      “Virtualization is not just a tactical ingredient to enable more efficient utilization of hardware,” Maritz said. “It is in fact a strategic way in which to build the data center of the future and to build a bridge to the cloud.”
      VMware, majority-owned by EMC, forecast that first-quarter revenue would rise 23 to 28 percent from 2009 to between $580 million and $600 million, distinctly above the $530 million average analyst forecast. It added that full-year revenue could rise to between $2.45 billion and $2.55 billion, above the $2.28 billion average analyst forecast.

      Avatar
      Chris Preimesberger
      https://www.eweek.com/author/cpreimesberger/
      Chris J. Preimesberger is Editor-in-Chief of eWEEK and responsible for all the publication's coverage. In his 16 years and more than 5,000 articles at eWEEK, he has distinguished himself in reporting and analysis of the business use of new-gen IT in a variety of sectors, including cloud computing, data center systems, storage, edge systems, security and others. In February 2017 and September 2018, Chris was named among the 250 most influential business journalists in the world (https://richtopia.com/inspirational-people/top-250-business-journalists/) by Richtopia, a UK research firm that used analytics to compile the ranking. He has won several national and regional awards for his work, including a 2011 Folio Award for a profile (https://www.eweek.com/cloud/marc-benioff-trend-seer-and-business-socialist/) of Salesforce founder/CEO Marc Benioff--the only time he has entered the competition. Previously, Chris was a founding editor of both IT Manager's Journal and DevX.com and was managing editor of Software Development magazine. He has been a stringer for the Associated Press since 1983 and resides in Silicon Valley.

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