Apps & Software
VMware's Revenue Punt Destroys Its Shares & EMC Shares (VMW, EMC)
Published:
Last Updated:
VMware, Inc. (NYSE: VMW) has posted earnings of $0.26 non-GAAP EPS on $412 million in revenues. First Call had estimates pegged at $0.24 EPS and $417.37 in revenues. Even though this represents an 80% revenue gain, this is going to be dismal for most VMware investors.
If the company offers guidance in the conference call, Next quarter’s estimates are $0.24 EPS and $436.41M in revenues; if the company offers 2008 targets, those estimates are $1.17 EPS and $2.08B in revenues. This was only the second earnings report out of the company and its first full quarter as a public company. Analysts had an average price target on VMware of $105.88, and we’d likely expect many analysts to have more cautious comments that this looks "near full value" based upon today’s numbers. Its former parent, EMC Corp. (NYSE: EMC) is set to report its earnings tomorrow.
Diane Greene, president and chief executive officer of VMware: "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. 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."
VMware stock closed down 1.2% to $79.55 in normal trading and its shares had mostly traded in a $76 to $83 trading range over the last five trading sessions. This is the worst event-risk trading seen on this with a drop of 25% to $62.37 in after-hours trading. In fact, this essentially wipes out most of the post-IPO gains. VMware will need to show some huge guidance to make this initial reaction a bit less violent.
You can imagine the headlines for Tuesday: "VIRTUALIZATION CRAZE ENDSAS FAST AS IT STARTED"….. That might prove true for VMware, althoughthis trend will be a huge savings boon for every large and mediumenterprise out there.
EMC shares are down some 9% or more to $15.30 in after-hours trading after a mere 1% gain in regular trading today.
Jon C. Ogg
January 28, 2008
Retirement can be daunting, but it doesn’t need to be.
Imagine having an expert in your corner to help you with your financial goals. Someone to help you determine if you’re ahead, behind, or right on track. With SmartAsset, that’s not just a dream—it’s reality. This free tool connects you with pre-screened financial advisors who work in your best interests. It’s quick, it’s easy, so take the leap today and start planning smarter!
Don’t waste another minute; get started right here and help your retirement dreams become a retirement reality.
Thank you for reading! Have some feedback for us?
Contact the 24/7 Wall St. editorial team.