Virtualization Technology News and Information
VMware shares off following quarterly filing

VMware Inc. shares fell more than 5% Monday as investors sold off the stock following the virtualization software company's second-quarter report that came out in a regulatory filing before the market opened.

VMware gave up $4.22 a share to close at $73.70. The stock has been one of the hottest investments on Wall Street since it debuted on Aug. 15 at $29 per share and shot up more than 75% on its opening session. The shares have since surged another 47% and traded briefly above the $80 mark last week.

Monday that confirmed strong earnings growth for VMware's quarter, which closed before the company's record-breaking IPO last month.

The virtualization-software developer said that its second-quarter earnings more than doubled from a year ago, as revenue grew for both its software-licensing and services businesses.

In a filing with the Securities and Exchange Commission, VMware said that it earned $34.2 million, or 10 cents a share, up from $15.2 million or 5 cents a share a year ago. Revenue almost doubled to $296.8 million from last year's $156.4 million.

A preliminary version of those results were included in the company's IPO filing.

The shares slipped in Monday trading, moving down about 5% to $73.97 by midday, going along with overall weakness in technology stocks.

Katherine Egbert, an analyst with Jeffries & Co., said that VMware's results "were right in line with what we expected." The company didn't give a third-quarter earnings or sales forecast, but did say that it expects is outstanding-shares figures to rise from 370 million in the third quarter to 400 million in the fourth quarter.

Egbert added that such an increase would have some effect on VMware's per-share earnings results.

VMware said that sales in its two main business lines improved from a year ago. License revenue rose to $204 million over last year's $113.3 million, while services sales more than doubled to $92.8 million from $43 million a year ago.

The company ended the quarter with $280 million in cash and cash equivalents, compared with $94.6 million in the second quarter of 2006.

Despite the IPO, VMware is still majority owned by EMC Corp., which retains about an 90% ownership stake following the offering.

Quoting the original article from MarketWatch, here.

Published Tuesday, September 18, 2007 6:02 AM by David Marshall
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