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Brier Dudley offers a critical look at technology and business issues affecting the Northwest.

October 21, 2008 at 1:10 PM

VMWare jumps in first quarter under Maritz

Sales of virtualization software apparently held up last quarter.

VMWare just announced its sales increased 32 percent and its net income was 21 cents per share, up from 18 cents a year ago.

After falling 9 percent to $18.73 before the earnings report, the stock leaped 22 percent to $22.85 in after-hours trading.

It’s some redemption for Paul Maritz, the former Microsoft boss who has been leading VMWare since a painful shakeup in July. His comment in the earnings release:

“VMware had another solid quarter, despite the challenging economic environment. This is a testament to the value our virtualization solutions provide to our customers. As commercial and government organizations are increasingly forced to do more with less, they’re moving VMware to the top of their short list of strategic priorities. Reducing hardware and operational costs, becoming more efficient, flexible and effective — these are the proven benefits we bring to our customer base of over 120,000.”

Full-year 2008 sales will be at the lower end of VMWare’s guidance, but the company’s maintaining its forecast of 42 percent to 45 percent growth over 2007.

From the release:

— Revenues for the third quarter were $472 million, an increase of 32% from the third quarter of 2007.

— GAAP operating income for the third quarter was $101 million, an increase of 54% from the third quarter of 2007.

— Non-GAAP operating income for the third quarter was $115 million, an increase of 26% from the third quarter of 2007.

— GAAP net income for the third quarter was $83 million, or $0.21 per diluted share, compared with $65 million, or $0.18 per diluted share, for the third quarter of 2007.

— Non-GAAP net income for the quarter was $93 million, or $0.24 per diluted share, compared with $85 million, or $0.23 per diluted share, for the third quarter of 2007.

— Cash was nearly $1.7 billion and deferred revenue was $780 million as of September 30, 2008.

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