Yesterday, after market close,
Citrix Systems Inc.
) declared financial results for the fourth quarter of 2011, which
managed to beat the Zacks Consensus Estimates. Global trends toward
virtualization and cloud computing are facilitating the company to
post solid results. However, management provided a weak financial
outlook for fiscal 2012, primarily due to the company's decision
for more acquisition and its sales force reorganization. Just a
couple of days ago Citrix's major competitor,
), provided a rosy outlook for fiscal 2012.
Quarterly net revenue was $619.4 million, up 17% year over year
and was in line with the Zacks Consensus Estimate of $619 million.
GAAP net income was $108.7 million or 58 cents per share compared
with a net income of $94.4 million or 49 cents per share in the
prior-year quarter. Quarterly adjusted EPS of 66 cents slivered
past the Zacks Consensus Estimate by a penny.
Gross margin in the fourth quarter of 2011 was 87.2% compared
with 88% in the year-ago quarter. Operating expenses in the
reported quarter were around $404.4 million compared with $353
million in the prior-year quarter. However, quarterly operating
margin was 21.9% compared with 21.4% in the prior-year quarter.
During the fourth quarter of 2011, Citrix repurchased 1.4
million of its common outstanding shares for around $99.2 million.
At the end of fiscal 2011, deferred revenue was $960 million, up
23.2% year over year.
During the fourth quarter of 2011, Citrix generated over $169.6
million of cash from operations and free cash flow (cash flow from
operations less capital expenditures) during the reported quarter
was approximately $146.5 million. At the end of fiscal 2011, the
company had nearly $1,477.6 million of cash and marketable
securities compared with $1,685.6 billion at the end of fiscal
2010. Balance sheet remains free of any debt obligations.
Revenue by Product Mix
Product Licenses revenue was $229.1 million, up 20% year over
year. License updates revenue was $192.9 million, up 9% year over
year. Software Services revenue was $114.4 million, an increase of
19% over the prior-year quarter, and Technical Services revenue was
$83 million, up 36% year over year.
Revenue by Product Grouping
Desktop solutions revenue in fiscal 2011 was $1,278.8 million,
up 12.5% year over year. Data Center and Cloud Solutions revenue
was $385.5 million, up 29.1% year over year. Online Services
revenue was $427.7 million, up 18.6% year over year. Revenue from
Other Products was $114.3 million, up 46.4% year over year.
Revenue by Geography
Revenue in the Americas (North & Latin America) region was
$278 million. Revenue in Europe, Africa, and the Middle East region
was $170.8 million. Revenue in the Asia Pacific region was $58.6
First Quarter of 2012 Financial Outlook
Management forecasted that the company's first-quarter 2012
revenue will be within the range of $555 million - $565 million.
GAAP EPS will be within the range of 30 cents - 31 cents and
non-GAAP EPS will be between 49 cents - 51 cents. Stock-based
compensation expenses will be 16 cents per share.
Full Fiscal 2012 Financial Outlook
Management forecasted that the company's fiscal 2012 revenue
will be within the range of $2.49 billion - $2.51 billion. GAAP EPS
will be within the range of $1.88 - $1.97 and non-GAAP EPS will be
within the range of $2.70 - $2.74. Stock-based compensation
expenses will be 71 cents per share.
We believe the virtualization market will continue to flourish
with desktop virtualization as its core theme. This trend is
expected to sustain future growth of both Citrix Systems. We
maintain our long-term Neutral recommendation on Citrix Systems.
Currently, it holds a short-term Zacks #3 Rank (Hold) on the
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