VMware (VMW) shares shot down 14% after-hours to $32.55 — hitting its all-time low — after the software company issued a disappointing Q3 outlook and blamed the sour economy for its tough time closing big deals.
VMware estimated Q3 sales would come between $462 million and $468 million, says MarketWatch; Wall Street was expecting sales of $497 million. Why the miss? “Uncertain economic conditions,” for one. Reuters:
VMware Inc is seeing customers take longer to sign contracts through which they buy large quantities of software over multiple years, Chief Financial Officer Mark Peek said on Tuesday.
The delays in signing such contracts, which are known as enterprise licence agreements, are partly because such deals are coming under increased scrutiny of senior executives at the corporations that purchase VMware’s business software, Peek said on a conference call with analysts.
“We are convinced this is due to the uncertain economic conditions,” Peek said on the call.
He also said that some of VMware’s customers were signing smaller, shorter-term contracts rather than entering into larger enterprise licence agreements.
VMware canned its founder and CEO Diane Greene earlier this month, replacing her with Microsoft (MSFT) vet Paul Maritz. Hard to blame that one on the economy.
See Also: VMware Tanks As CEO Greene Gets Ousted