) reported third quarter earnings (including stock based
compensation expense of 23 cents per share) of 28 cents per
share, which missed the Zacks Consensus Estimate by 3 cents.
Revenue for the quarter decreased marginally from the
previous-year quarter to $548.0 million and was below
management's guided range of $550.0 million to $570.0 million.
Revenue also fell shy of the Zacks Consensus Estimate of $561.0
The lower-than-expected revenue was a result of tepid demand
for Autodesk's solutions. License revenue for the quarter was
down 4.3%, which fully offset the 6.3% increase in maintenance
revenue and resulted in a decline in overall revenue.
Management also cited that 'Superstorm Sandy' had a negative
effect on quarterly revenue. Moreover, sluggishness in the
macroeconomic environment also led to the weaker-than-expected
On a segmental basis, Platform Solutions and Emerging Business
("PSEB") revenue decreased 2.0% year over year to $205.0 million.
Revenue from the Architecture, Engineering and Construction
("AEC") business segment increased 7.0% year over year to $163
million, while revenue from Manufacturing segment inched down
1.0% from the year-ago quarter to $132.0 million. Media and
Entertainment revenue declined 9.0% year over year to $48.0
On geographic basis, revenue from America (up 4.0% year over
year) was fully offset by the decrease in Asia-Pacific (down 3.0%
year on year), and EMEA (down 3.0% year over year). Revenue from
emerging economies, which represented 15.0% of the total revenue,
was down 9.0% compared with the year-ago quarter.
Gross profit (including stock-based compensation) remained
flat on a year-over-year basis to $499.9 million. Gross margin
also remained flat on a year over year basis to 91.2%.
Operating expenses (including stock-based compensation)
increased 4.1% year over year to $406.7 million, primarily
attributable to higher research & development expenses (up
8.8% year over year) and general and administrative expenses (up
12.3% year over year) which fully offset the 0.8% decline in
marketing & sales expenses. Moreover, operating expenses as a
percentage of revenue expanded 300 bps to 74.2% in the
Operating income (including stock-based compensation) of $93.2
million was down 14.9% year over year. Operating margin came in
at 17.0% in the quarter, down 300 bps year over year, primarily
due to higher-than-expected operating expenses.
Net income on non-GAAP basis came at $107.8 million or 47
cents per share, which improved from $102.1 million or 44 cents
in the previous-year quarter.
Our non-GAAP calculations may differ from management's
presentation due to the inclusion/exclusion of some items that
were not considered by management.
The company exited the third quarter with total cash and cash
equivalents of $827.0 million compared with $930.2 million in the
previous quarter. Cash flow from operating activities was $157.0
million compared with $107.0 million in the prior quarter.
For fourth quarter 2013, Autodesk expects revenue in the range
of $570.0 million to $600.0 million. Non-GAAP earnings is
expected in the range of 43 cents to 51 cents per share, which
excludes 13 cents related to a stock-based compensation expense,
3 cents for restructuring charges and 9 cents related to
amortization of acquisition related intangibles.
For fiscal 2013, Autodesk expects revenues in the range of
$2.28 billion to $2.31 billion and expects non-GAAP earnings in
between $1.84 and $1.92 per share.
Autodesk maintains a dominant position in the computer-aided
designing market. We believe that Autodesk's expanding product
portfolio, broadening industry applications and geographic reach
will help sustain longer-term growth. The company's initiatives
to shift towards cloud and mobile computing are expected to be
However, sluggish macroeconomic environment along with the
company's high exposure to Europe amidst the lingering financial
turmoil are the near term headwinds. Moreover, margin
contractions coupled with slower-than-expected revenue growth and
a tepid outlook keep us cautious on the stock.
Additionally, customer concentration and increasing
Adobe Systems Inc.
) and Dassault Systemes are the other headwinds going
We have a Neutral recommendation on Autodesk's shares in the
long term. Currently, Autodesk has a Zacks #4 Rank, which
translates into a short-term (1-3 months) Sell rating.
ADOBE SYSTEMS (ADBE): Free Stock Analysis
AUTODESK INC (ADSK): Free Stock Analysis
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