Citrix Beats Q3 Earnings Estimate - Analyst Blog

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Citrix Systems Inc. ( CTXS ) declared mixed financial results for the third quarter of 2013. While net income surpassed the revised Zacks Consensus Estimate, total revenue slightly fell below the same.

On Oct 9, the company significantly reduced the financial outlook for the third quarter. Management also provided a disappointing guidance for the ensuing fourth quarter. As a result, the stock price of Citrix plummeted 17% in the last couple of week. Nevertheless, the board of directors has authorized a $500 million increase in the share buy-back program.   

GAAP net income, in third-quarter 2013, was $76.7 million or 41 cents per share compared with $78.2 million or 41 cents per share in the prior-year quarter. Quarterly adjusted earnings per share of 53 cents easily beat the Zacks Consensus Estimate of 49 cents. The total revenue was $712.7 million, up 11.1% year over year but slightly below the Zacks Consensus Estimate of $715 million.

Gross margin in the third quarter of 2013 was 82.6% compared with 83.5% in the year-ago quarter. Operating expenses were around $501.4 million compared with $452.9 million in the prior-year quarter. Quarterly operating margin was 12.3% against 12.9% in the prior-year quarter.

At the end of the reported quarter, deferred revenues were $1.27 billion, up 21% year over year. Citrix repurchased 0.8 million of its common shares for a total consideration of about $57.64 million.

During the third quarter of 2013, Citrix generated approximately $223 million of cash from operations and free cash flow was around $163.1 million. The company had nearly $1,656.1 million of cash and marketable securities compared with $1,523.6 million at the end of 2012. The balance sheet remains free of any debt obligations.

Revenues by Product Mix

Product and Licenses revenues were $201.4 million, up 2.9% year over year. License updates and maintenance revenues were $329.4 million, up 15.6% year over year. Software-as-a-Service revenues were $148.2 million, an increase of 14.3% over the prior-year quarter and Professional Services revenues were $33.7 million, up 8.7% year over year.

Revenues by Product Grouping

Mobile and Desktop revenues in the third quarter of 2013 were $380.9 million, up 8.3% year over year. Networking and Cloud Solutions revenues were $146.4 million, up 15% year over year. Software-as-a-Service revenues were $148.2 million, an increase of 14.3% over the prior-year quarter. Revenues from Other Products were $37.2 million, up 13.4% year over year.

Revenues by Geography

Revenues in the Americas (both North & Latin America) region were $306.1 million, up 8.6% year over year. Revenues in Europe, Africa, and the Middle East region were $188.2 million, up 14.7% year over year. Revenues in the Asia Pacific region were $70.3 million, up 7% year over year.

Fourth Quarter of 2013 Financial Outlook

Management forecasted fourth-quarter 2013 revenues of $800 million to $810 million. Its mid-point of 805 million is well below the current Zacks Consensus Estimate of $820 million. GAAP earnings per share are expected to be 66 cents to 70 cents and non-GAAP earnings per share will be between 95 cents and $1.00. Excluding stock-based compensation expenses of 26 cents per share, its mid-point of 72 cents is significantly below the current Zacks Consensus Estimate of 87 cents.

Other Stocks to Consider

Citrix Systems currently has a Zacks Rank #4 (Sell). Other stocks worth considering in the Business Software & Services industry are Blackbaud Inc. ( BLKB ), Infoblox Inc. ( BLOX ) and PTC Inc. ( PMTC ). All three currently carry a Zacks Rank #1 (Strong Buy).



BLACKBAUD INC (BLKB): Free Stock Analysis Report

INFOBLOX INC (BLOX): Free Stock Analysis Report

CITRIX SYS INC (CTXS): Free Stock Analysis Report

PTC INC (PMTC): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.



This article appears in: Investing , Business , Earnings , Stocks

Referenced Stocks: BLKB , BLOX , CTXS , PMTC

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