VMware tempers solid results with gloomy outlook

 

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By Stuart Turton

Posted on 22 Oct 2008 at 10:50

VMware's revenues increased by 32% in the third quarter, but the company is remaining cautious with regards to its full year outlook.

The virtualisation company saw revenues rise to $472 million from the same time last year, with its GAAP operating income hitting $101 million, a 54% increase.

Despite this VMware is warning shareholders to expect full-year revenues to arrive at the lower end of estimates, citing an "extreme reluctance" by businesses to invest in new deployments given the uncertainty surrounding the economy.

"Current uncertainty in global economic conditions makes it particularly difficult to predict product demand and other related matters and makes it more likely that VMware's actual results could differ materially from expectations," the company noted in its financial statement.

As a result of this uncertainty the company claims that in the next quarter and possibly beyond, it will only be making "important and strategic" hiring decisions.

The company did offer a bright note, however. VMware claims its operations are unlikely to be as hard hit as some of its rivals due to the fact that its virtualisation technology offers a relatively quick way to cut costs, which it believes will be attractive to businesses.