BMC Software Inc.
) reported third quarter 2013 earnings per share of 80 cents,
missing the Zacks Consensus Estimate of 85 cents.
Total revenue in the reported quarter was $580.2 million, up
5.8% from $548.2 million in the year-ago quarter.
The company registered massive growth in the Professional
services segment. This business performed largely in line with
the company's expectations.
Enhanced process discipline, backlog scheduling and resource
allocation have helped the company to report stronger results.
The segment has directly benefited from the transformational
projects with some of the large customers, thus strengthening the
company's competitive position.
License revenue in the third quarter was $232.3 million, down
3.2% from the year-ago quarter. This apart, the Maintenance
revenue was $288.7 million, up 6.0% from the year-ago period.
Total bookings for the third quarter were $514 million, a
decrease of 2% from the year-ago quarter on both reported and
constant currency basis. Trailing 12-month bookings were $2.1
billion, down 6% as reported and 5% in constant currency.
Operating income was $147.6 million in the quarter, down 8.8%
from $161.8 million in the year-ago quarter. Excluding special
items like severance costs and amortization of intangible assets
but including stock-based compensation expense, non-GAAP
operating income was $168.7 million in the reported quarter, down
7.1% from $181.6 million in the prior-year quarter.
Net income on a GAAP basis was $106.3 million or 70 cents
compared with $119.9 million or 71 cents in the year-ago quarter.
Excluding special items such as amortization and severance costs
but including stock-based compensation expense, non-GAAP net
income was 80 cents per share, in line with the year-ago
Balance Sheet, Cash Flow & Share
BMC Software generated $131.8 million in cash flow from
operations in the reported quarter versus $164.3 million in the
year-ago quarter. The company exited the quarter with cash and
investments of $1.18 billion, down from $1.44 billion in the
During the reported quarter, BMC repurchased a total of 14.3
million shares. In Nov, the company repurchased 13.1 million
shares, which is in addition to the 1.2 million shares we
repurchased for $50 million earlier in the quarter.
BMC expects non-GAAP earnings per share to be in the range of
$3.35 to $3.45 per share for fiscal 2013. This apart, BMC expects
fiscal 2013 cash flow from operations to be between $735 million
and $785 million.
BMC reported weak third quarter 2013 results, with EPS below
the Zacks Consensus Estimate, but revenue up on a year-over-year
basis. Moreover, bookings also declined from the year-ago
quarter. Most of the company's business segments grew but cash
position deteriorated sequentially.
We are a bit apprehensive about the bleak business conditions
in Europe. Moreover, growing competition from big players such as
) will pose a challenge for the company.
Currently, BMC has a Zacks Rank #3 (Hold).
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