Options Wonderland

[3xBuBu]

I thought the market will beat you up even you beat their estimate like AMZN
but VMware's strong 3Q impresses Wall Street
VMware blew away analyst expectations with a scorching third-quarter financial report Wednesday, thanks to strong sales of 'hypervisor' server software and other products.

The technology VMware sells enables a single computer to function like multiple machines, requiring companies to spend less money on computer hardware and reducing energy costs for large corporate data centers.

VMware posted a profit of $64.7 million, or 18 cents per share, up from $19.2 million, or 6 cents per share, in the year-ago quarter. Revenue rose 90 percent to $357.8 million from $188.8 million.

Adjusted earnings, which exclude stock options expenses and the amortization of intangible assets and the write-off of in-process research and development, were $85 million, or 23 cents per share.

On that basis, which does not comply with generally accepted accounting principles, analysts polled by Thomson Financial expected a profit of 17 cents per share on revenue of $334.4 million.

Shares of VMware closed Wednesday at $103.52, down $2.63 or 2.5 percent. After the report was released, they gained $5.07 in extended trading.

Though VMware shares have been listed on the New York Stock Exchange for only about two months, the company's market capitalization is already $38.8 billion.

That makes it the fifth-most-valuable business software company after Microsoft Corp. (NASDAQ:MSFT) , Oracle Corp. (NASDAQ:ORCL) , Germany's SAP AG (NYSE:SAP) and Adobe Systems Inc. (NASDAQ:ADBE)

Google Inc. (NASDAQ:GOOG) and IBM (NYSE:IBM) Corp. are not included because the technology industry considers Google a consumer search company and IBM a diversified consulting company, although they create software for corporate clients.