VM Ware shares drop 26 percent after CEO replaced

0 Comments | Oakland Tribune, Jul 8, 2008 | by BAY AREA NEWS GROUP

Mattson Technology Inc. suffered a worse-than-expected loss during its second quarter, the semiconductor equipment maker disclosed Tuesday, in a grim revision to its quarterly forecast.

Fremont-based Mattson said the loss for the three months that ended June 29 was 24 to 26 cents a share. That was far worse than the initial prediction of a loss of 10 cents to 17 cents a share.

The revision reflects "protracted weakness " in the worldwide semiconductor market, resulting in lower shipments to some major customers, Mattson said in a prepared release. Mattson's shares fell more than 9 percent in after-hours trades late Tuesday.

Software

Shares of Palo Alto-based VMware Inc. plunged 26 percent Tuesday after the software maker replaced co-founder and CEO Diane Greene and warned that revenue would fall short of prior estimates. VMWare, which is controlled by data-management provider EMC Corp., has fallen mightily since a blockbuster partial spinoff last year. After its initial public offering in August, VMWare stock tripled from its $29 opening price in the first month -- the biggest technology IPO since Google Inc. went public in 2004.

But since hitting a 52-week high of $125.25 in October, the shares have lost nearly 70 percent of their value.

VMWare, whose virtualization technology lets one computer act as multiple machines running different operating systems, said it had replaced Greene with former Microsoft executive Paul Maritz, effective immediately.

The company made the move as it revealed that fiscal 2008 revenue will fall "modestly" below prior guidance, which had called for 50 percent growth from last year's $1.33 billion in sales. On average, analysts surveyed by Thomson Financial were expecting revenue of $2 billion for this year. Shares dropped $13.70, or 26 percent, in morning trading, and hit a new low of $38.87.

Video games

Redwood City-based video game publisher Electronic Arts said Tuesday it is in "substantial compliance" with the Federal Trade Commission's request for information about its proposed buyout of smaller rival Take-Two Interactive Software Inc.

Based on its agreement with the FTC, EA also said in a regulatory filing it will not close any acquisition before Aug. 21 or if the FTC closes the investigation -- whichever is earlier.

Compiled from staff and wire reports. Got Bay Area business news? Reach Drew Voros at 925-943-8099 or dvoros@bayareanewsgroup.com.

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Business Editor

Drew Voros

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avoros@ bayareanewsgroup.com

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