VMware's sales disappoint, shares plunge

Virtualization specialist reports sharp rise in earnings, but sales fall short of what some analysts had been expecting. Shares fall more than 25 percent in after-hours trading.

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."

Featured Video
This content is rated TV-MA, and is for viewers 18 years or older. Are you of age?
Sorry, you are not old enough to view this content.

Microsoft leaves Apple in the dust with tablet and laptop innovation in 2015

Will there be one Apple Ring to rule them all? That's what a patent application says. Plus, building the thinnest gadget isn't innovation anymore and Apple just got a reality check from Microsoft.

by Brian Tong