VMware Worries About Declining Sales

VMware Worries About Declining Sales

In the next quarter’s sales report, VMware may announce its first ever drop in revenues within two years. The company puts the blame on recession for having a lower than forecasted revenues on the first quarter of this year. 
 

VMware’s license returns decreased by 13 percent from that of last year, amounting to only $257 million.  This is attributed to lower IT spending during the worldwide economy slump. Meanwhile, the company has recorded a 48 percent boost in service revenue, which makes up for the revenue drop in its other businesses. 

 

VMware accumulated $69.9 million of net income for the first quarter, and earnings of $0.25 per share. The figures exceeded the expectations of financial analysts. 

 

According to CFO Mark Peek, VMware doesn’t expect to go through a smooth ride this quarter because of the upshots of recession and the shift to an updated version of the firm’s key software. 

 

"As a result, we expect our second-quarter revenues will be flat, or even down, compared to the second quarter of 2008,”  Peek  said.