VMware's sales disappoint, shares plunge
VMware took in less money on virtualization software than expected in the fourth quarter, leading to a steep drop in the company's shares.
The software maker said Monday that it earned $78 million, or 19 cents per share, as compared with $31 million, or 9 cents per share in the prior quarter. Its sales were also up sharply, to $412 million, though that was slightly less than the average analysts' forecast.
After the report, VMware shares plummeted more than 25 percent in after-hours trading. As of 3 p.m. PST, its shares were trading at $60.60, down $22.40 or more than 26 percent.
In a statement Monday, CEO Diane Greene praised the company's position, even as it faces a stepped-up attack from Microsoft and other rivals.
"We begin 2008 with more than 100,000 customers, 500 technology and consulting partners, nearly 10,000 go-to-market partners, and more than 5,000 employees," Greene said. "As others begin to enter the market, VMware and our partners are continuing to broaden and deepen our highly reliable end-to-end virtualization solutions."
During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina. 
testing the waters to see who fits better into
their infrastructure. Just because VMWare sales
weren't what they had expected doesn't mean
Microsoft is doing any better with the
crippleware they're peddling.
With that said, VMWare is the commander of the
virtualization realm and will continue to be for
some time. Just because MS announces a product
doesn't mean it's a good product. They haven't
been around for as long in that game, so it's
not likely they'll do any real damage to them in
the near future. Further down the line, maybe,
but not today.
Don't you guys get it yet -- these Wall Street guys are all con artists and swindlers. If they make you rich it is purely by accident.
"Underwriters of the offering included Citigroup (C.N: Quote, Profile, Research) JPMorgan Chase & Co. (JPM.N: Quote, Profile, Research), Lehman Brothers (LEH.N: Quote, Profile, Research), Credit Suisse, Merrill Lynch & Co. Inc. (MER.N: Quote, Profile, Research) and Deutsche Bank Securities."
It has nothing to do with scamming.
A lot of people panic when a stock falls.
I love VMWare. I have used their stuff for years. They just over estimated what they could get out of this year. There wasn't much talk about a recession when they set the bar. How were they to know.
There are many companies in the same boat. I know the retailer I work for didn't meet the plan for the last half of the year.
- What's your opinion?
- by Seaspray0 January 28, 2008 8:36 PM PST
- Sales are up over last year. Profits per share are up over last year. Stock drops 25%? This doesn't make sense... unless it's part of an overall picture. i.e. another tech stock (apple) had a similar plunge but has done well over the last year. Global markets plunge over 10% last week. Does anyone else agree? Is this an isolated incident or are we looking at something much bigger?
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- Apple is probably asking the same thing...
- by Penguinisto January 28, 2008 9:40 PM PST
- I mean, they kicked iron-clad arse last year in profits, growth,
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- The Reason
- by GotAMD January 30, 2008 8:16 AM PST
- The reason this happened is that Wall Street bases stocks' pricing on expectations. When a company fails to meet those expectations, or even lowers future expectations, it will be hit. That's especially true in this market. Look at Intel and it's record fourth quarter. The stock tanked.
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(9 Comments)and nearly every other factor.
Time to shoo away the gamblers and daytraders, and stick with
just pleasing the real investors, methinks.
/P