Yesterday, VMware reported quarterly revenue that fell short of Wall Street expectations and forecast a slowdown in sales growth, sending its shares down more than 26 %.
The highlights from the official announcement :
Total revenues for the fourth quarter were $412 million, an increase of 80% compared to the year-ago quarter.
GAAP operating income for the fourth quarter was $76 million compared to $37 million in the fourth quarter of 2006. Non-GAAP operating income was $108 million, representing 26% of fourth-quarter revenues and an increase of 72% over the year-ago quarter.
GAAP net income for the quarter was $78 million, or $0.19 per diluted share, compared to $31 million, or $0.09 per diluted share, in the year-ago quarter. Non-GAAP net income for the quarter was $103 million, or $0.26 per diluted share. GAAP and non-GAAP net income for the fourth quarter of 2007 include a $0.01 per diluted share benefit from a change in tax rate.
Total revenues for the full fiscal year 2007 were $1.33 billion, an increase of 88% compared to 2006.
GAAP operating income for the full fiscal year 2007 was $235 million compared to $121 million in 2006. Non-GAAP operating income for the year was $338 million, representing 26% of full-year revenues and an increase of 77% over 2006.
GAAP net income for the year was $218 million or $0.61 per diluted share, compared to $86 million, or $0.26 per diluted share, in 2006. Non-GAAP net income was $295 million or $0.82 per diluted share.
VMware shares had quadrupled in value after an August initial public offering, but have dropped since November.
The company on Monday forecast revenue growth of 50 percent in 2008, versus 88 percent in 2007. That would suggest revenue of $2 billion, shy of Wall Street targets.
“If you miss your numbers in just your second quarter after going public that suggests the stock was overhyped,” said Trip Chowdhry, an analyst at Global Equities Research.
According to the Server Virtualization Blog , the company’s CEO Diane Greene maintained that the company will not lower product pricing in 2008. “We do think we can maintain our pricing,” Greene said on an earnings call with investors. “We anticipate continuing our pricing over the course of the year.”