Virtual computing pioneer VMware
Sales increased 18% year-over-year to $608 million. While GAAP earnings shrank from $0.29 per share a year ago to $0.14 per share this time around, free cash flow ballooned by 45% to $259 million. Longtime Fools should already know that cash flows matter more than earnings anyhow, so the magical jumping stock seems to be perfectly appropriate today.
In fact, there's more good news if you dig below the surface. Product license sales actually declined by 3% from 2008 levels -- all of the growth was made up of increased service revenue. It's the old repeatable business model at work -- give away the handle and make a killing on the blades, much like robotic surgery expert Intuitive Surgical
VMware may feel like a new kid on Wall Street, but don't be fooled: The management team comes from rich and inveterate backgrounds -- mostly from Microsoft
As for VMware's future business prospects, you know that cloud computing is the next big thing in the IT sector, attracting every major player from Microsoft and Cisco Systems
Expect growth to continue at breakneck speed for many years as this bona fide Rule Breaker soars to new heights. Frolic in VMware's splendor by way of the comments box below!
Fool contributor Anders Bylund owns shares in Google and Intuitive Surgical, but he holds no other position in any of the companies discussed here. He has been working with virtual machines since 2001 and lives his entire life in the clouds. Microsoft is a Motley Fool Inside Value pick. Google, Intuitive Surgical, and VMware are Motley Fool Rule Breakers recommendations. Amazon.com is a Motley Fool Stock Advisor choice. Procter & Gamble is a Motley Fool Income Investor recommendation. Motley Fool Options has recommended a diagonal call position on Microsoft and owns shares of Procter & Gamble. Try any of our Foolish newsletters today, free for 30 days. You can check out Anders' holdings and a concise bio if you like, and The Motley Fool is investors writing for investors.
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