BOSTON (Reuters) - Business software maker VMware Inc (VMW.N: Quote, Profile, Research) reported a higher first quarter profit on Tuesday as its revenue rose a better-than-expected 69 percent.

Its shares rose 12 percent in after-hours trading.

The company also reiterated its forecast for 2008 revenue growth of about 50 percent, reassuring investors who had worried that increased competition from companies like Oracle Corp (ORCL.O: Quote, Profile, Research) and Microsoft Corp (MSFT.O: Quote, Profile, Research) would hurt growth, analysts said.

VMware said first-quarter net income rose to $43 million from $41 million. Earnings per share fell to 11 cents from 12 cents a year earlier, when it had fewer shares outstanding.

Revenue rose to $438.2 million from the year-earlier period's $258.7 million, led by sales of VMware's software that allow companies to run multiple "virtual" server computers on a single server. Its top-selling product, known as ESX Server, allows one server to perform the work of 10 or more machines.

Analysts had expected VMware to report revenue of $421.3 million, according to Reuters Estimates.

VMware had quarterly profit excluding items of 22 cents, in line with the Wall Street estimate.

VMware's stock rose to $64.99 in extended trading, compared to its New York Stock Exchange close of $58.02. The company's shares made their debut at $29 in August 2007 and reached a high of $125.25 in October.

(Reporting by Jim Finkle; Editing by Andre Grenon and Carol Bishopric)

© Thomson Reuters 2008 All rights reserved