VMWare Rises After-Hours on Blowout Revenue Forecast

VMWare (VMW) is soaring after-hours on a strong earnings report. As I wrote earlier, analysts expected it to earn 26 cents a share excluding stock-based compensation and other items, but it exceeded those expectations by 19% -- earning 31 cents a share. But what seems to be boosting market enthusiasm is a very bullish revenue forecast.WMWare had experienced tepid 3.7% revenue growth in the third quarter of 2009 but it is now forecasting a booming year ahead. According to VMWare, it expects "first quarter revenues to be in the range of $580 and $600 million, an increase of 23% to 28% from the first quarter 2009. [VMWare] expects annual 2010 revenue to be in the range of $2.45 billion and $2.55 billion, an increase of 21% to 26% from 2009."

If there was any bad news, it was that VMware profit dropped 49% on higher research and development costs, which lowered operating margins. But investors seem very enthusiastic about the faster growth expectations and the stock is up over 18%.

Peter Cohan has no financial interest in VMWare securities.
Read Full Story
  • DJI25628.90-623.34-2.37%
  • NIKKEI 22520710.9182.900.40%
    Hang Seng26179.33130.610.50%
  • USD (PER EUR)1.110.00000.00%
    USD (PER CHF)1.030.00000.00%
    JPY (PER USD)105.390.00000.00%
    GBP (PER USD)1.230.00000.00%