BMC Software Inc.
) reported first-quarter 2014 earnings per share of 58 cents,
missing the Zacks Consensus Estimate of 59 cents. Although
adjusted EPS has increased by 9 cents compared to the year ago
Total revenue in the reported first quarter of 2014 was $483.6
million, down 4.1% from $504.4 million in the year-ago quarter.
The downside in revenues can be attributed to a significant
decline in License revenues and soft Professional Services
License revenues in the first quarter were $141.0 million,
down 17.8% from the year-ago quarter. Maintenance revenues were
$289.3 million, up 3.8% from the year-ago period. Professional
Service revenues were $53.3 million, down 1.3% from the year-ago
The GAAP operating income was $69.7 million in the quarter,
down 5.7% from $73.9 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 $115.2 million in the reported quarter, up
4.3% from $110.4 million in the prior-year quarter.
Net income on a GAAP basis was $52.5 million or 36 cents per
share compared with $54.1 million or 33 cents per share 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 $83.9 million or 58 cents per
share, compared with $79.6 million or 49 cents per share in the
Balance Sheet, Cash Flow & Share
BMC Software generated $267.1 million cash flow from
operation, down from $347.2 million in reported in the quarter.
The company exited the quarter with cash and investments of $1.64
billion, up from $1.38 billion in the prior quarter.
BMC Applies For Privatization
BMC has already made a public announcement and is moving ahead
with its privatization process, which we believe would be
completed within the next couple of quarters. This is a prudent
decision as this could help BMC to tap the considerable
opportunity in cloud computing quickly and efficiently. This
could in turn improve BMC's competitive positioning versus cloud
computing stalwarts such as
BMC reported mixed first-quarter 2014 results, with earnings
per share falling short of the Zacks Consensus Estimate although
increasing year-over-year and revenues down from the year-ago
quarter. The company showed a decent operating performance and
has decent cash-generation ability. We remain wary about the
conditions in Europe and competition from strong peers.
On the other hand, BMC has not been able to penetrate the
cloud computing market in a big way although cloud computing is
The company's decision to privatize is a decent step forward,
which will help them to revamp and restructure its business
model. This will help the company to capitalize on its core
Currently, BMC has a Zacks Rank #3 (Hold).
BMC SOFTWARE (BMC): Free Stock Analysis
SALESFORCE.COM (CRM): Free Stock Analysis
MICROSOFT CORP (MSFT): Free Stock Analysis
ORACLE CORP (ORCL): Free Stock Analysis
To read this article on Zacks.com click here.