) reported fiscal second-quarter 2014 non-GAAP earnings of 35
cents, which decreased 8.4% from the year-ago quarter and was
better than the Zacks Consensus Estimate of 31 cents.
Revenues for the quarter decreased 1.2% year over year to
$561.7 million, but just managed to beat the Zacks Consensus
Estimate of $561.0 million. Revenues were adversely affected by a
downturn in some of the company's end markets, which negatively
impacted the company's products like AutoCAD and AutoCAD LT in
However, the Architecture, Engineering and Construction (AEC)
business segment performed well. Region wise, Americas and
Asia-Pacific (APAC) posted strong growth, particularly Japan.
Segment wise, revenues from the Platform Solutions and
Emerging Business ("PSEB") were down 9% on a year-over-year
basis. Revenues from the AEC and Manufacturing business segments
increased 9% and 2% respectively, on a year-over-year basis.
Autodesk's Media and Entertainment segment recorded a revenue
decline of 11% year over year. Though, Autodesk reported an 18%
increase in revenues from Suites, revenues from its Flagship
products were down 11% year over year.
Geographically, declines in revenues from Asia Pacific (down
1.0% from the year-ago quarter) and EMEA (down 4.0% year over
year) were offset to a certain extent by increased revenues from
Americas (up 2% year over year).
Revenues from emerging economies, which represented 15.0% of
the total revenue, were down 9% on a year-over-year basis.
Gross profit on a non-GAAP basis decreased 2.9% from the
year-ago quarter to $493.9 million. Gross margin came in at 87.9%
compared with 89.5% in the year-ago quarter. The decline was
primarily due to lower revenues and unfavorable revenue mix.
Including stock-based compensation, gross profit came in at
Operating expenses on a non-GAAP basis decreased 1.6% from the
year-ago quarter, to $369.7 million due to lower marketing and
sales expenses (down 6.2% year over year), somewhat offset by
higher research and development expenses (up 3.1% year over
year). General and administrative expenses were also up 4.0% from
the year-ago quarter.
Moreover, operating expenses, as a percentage of revenues,
contracted 30 basis points (bps) to 65.8% in the quarter.
Including stock-based compensation, operating expenses came in at
Non-GAAP operating income decreased 5.1% from the year-ago
quarter to $136.6 million. Operating margin contracted 100 bps
from the year-ago quarter to 24%, primarily due to lower revenue
base. Including stock-based compensation of $31.0 million,
operating income came in at $105.6 million.
Net income on a non-GAAP basis was down 8.4% year over year to
$101.8 million. Including stock-based compensation, net income
came in at $78.9 million or 35 cents, compared with $84.6 million
or 36 cents per share in the year-ago quarter.
Autodesk exited fiscal second quarter 2014 with total cash and
cash equivalents of $1.40 billion compared with $1.66 billion in
the previous quarter. Cash flow from operating activities was
$65.0 million compared with $224.1 million in the prior
For the third quarter of 2014, Autodesk expects revenues in
the range of $540 million-$555 million and earnings per share in
the range of 36 cents - 40 cents on a non-GAAP basis. Autodesk
did not provide full year 2014 guidance.
Autodesk's second-quarter results were negatively impacted by
the macroeconomic environment and soft end-market demand. This
led to lower margins. However, Autodesk witnessed continued
demand for design related suites and the AEC business
Moreover, going forward, Autodesk's new cloud-based offerings
are expected to gain traction. The company's focus on expanding
its mobile applications for both
Android platform will further drive market share, going
However, sluggish macro-economic environment, weakness in
emerging markets, customer concentration and increasing
Adobe Systems Inc.
) are the major concerns. Moreover, continued investments in news
products are expected to hurt margins in the near term.
Currently, Autodesk has a Zacks Rank #4 (Sell).
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