BMC Software Inc.
) reported fiscal second quarter 2013 earnings per share of 71
cents, inching past the Zacks Consensus Estimate of 70 cents.
Total revenue in the reported quarter was $548.2 million, down
1.5% from $556.7 million in the year-ago quarter.
The company registered a massive growth in ESM wins during the
quarter and witnessed $1 million in license bookings, registering
a growth of 26% year-over-year. In this segment, the company won
new customers such as China Construction Bank, Credit Agricole,
JDA, Swiss PostFinance and Tata Motors.
License revenue in the second quarter was $209.2 million, down
8.9% from the year-ago quarter. This apart, the ESM license
revenue was $129 million, down 12%, while MSM license revenue
dropped 4% year on year to $80 million.
Maintenance revenue in the second quarter was $285.4 million,
an increase of 5.5% compared with the year-ago period. Moreover,
ESM maintenance revenue was $162 million, up 11.0%. MSM
maintenance revenue was $124.0 million, down 1.0%, compared to
the second quarter of fiscal 2012.
Professional services revenue, which is included in the ESM
business unit, decreased 5.1% year on year to $53.6 million.
Cloud-related license bookings in first half of fiscal 2013
jumped almost 30.0% over fiscal 2012 first half.
Operating income was $138.0 million, down 14.3% from $161.0
million in the year-ago quarter. Excluding special items such as
severance costs and amortization of intangible assets but
including stock-based compensation expense, non-GAAP operating
income was $161.5 million in the reported quarter, down 12.9%
from $185.6 million in the prior-year quarter.
Net income on a GAAP basis was $97.8 million or 61 cents
compared with $114.7 million or 65 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 71 cents per share compared with 69 cents in the
Balance Sheet, Cash Flow & Share
BMC Software generated $66.5 million in cash flow from
operations in the reported quarter versus $219.6 million in the
previous quarter. The company exited the quarter with cash and
investments of $1.44 billion, down from $1.60 billion in the
During the reported quarter, BMC repurchased 4.8 million
shares, spending $200 million. The company has been authorized to
repurchase shares worth $1.0 billion during the current
For fiscal 2013, BMC expects non-GAAP diluted earnings per
share in the range of $3.49 to $3.59 per share. On an average,
this would represent a 9.0% increase over fiscal 2012.
BMC reported better-than-expected third quarter 2013 results,
with EPS beating the Zacks Consensus Estimate, although revenue
declined marginally. However, the company witnessed substantial
cloud bookings. Most of its business segments grew, but cash
position deteriorated compared to the previous quarter.
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.
We have a Neutral recommendation on BMC over the long term.
Currently, BMC has a Zacks #3 Rank, which implies a Hold rating
on a short-term basis.
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