VMware doubled its profit in the fourth quarter, and raised revenue by 80% year over year, but missed Wall Street’s sales target by $5 million. As a result, the stock plunged after hours, losing more than 20% of its value in a few minutes. I suspect Wall Street believes the company’s guidance for the first quarter which won’t be given for a few minutes, stinks. I’ll update you. Turns out the company is not givin VMware doubled its profit in the fourth quarter, and raised revenue by 80% year over year, but missed Wall Street’s sales target by $5 million. As a result, the stock plunged after hours, losing more than 20% of its value in a few minutes. I suspect Wall Street believes the company’s guidance for the first quarter which won’t be given for a few minutes, stinks. I’ll update you. Turns out the company is not giving much guidance at all. But it does predict revenue growth of 50% for 2008; analysts had targeted growth of about 64%. That implies revenue of about $1.995 billion; the Street has been looking for $2.08 billion. Shares now down 26% after hours. Re the guidance: I should have noted that this is only the company’s second reported quarter since going public and it did not give guidance for the just-reported quarter. It’s possible there were over-inflated expectations on the part of analysts. This reminds me a bit of what happened to Apple earlier this month. The company had a solid quarter, but got roasted on tepid guidance. (VMware, though, missed on the top line, which is a big part of the reason for the selloff.) In any case, both Apple and VMware have been in the hypergrowth mode and both are slowing. VMware bulls (as did company execs) would say that it’s the law of large numbers — cross the $1 billion threshold and it’s that much harder to sustain growth on a percentage basis. I’m not making an excuse for VMware. It’s fairly clear that competition in the market for virtualization software is heating up as the economy slows. And the tone of the questioning from analysts on VMware’s earnings call indicates that there is real concern that the back half of the year will be slow. If VMware doesn’t think analysts are doing a good job making projections, the company should give them more mateial i.e. forward guidance, to work with. (Disclosure: I have small positions in VMware and its parent, EMC) I welcome your comments, suggestions and tips. Reach me at bill_snyder@infoworld.com Technology Industry