Citrix Systems Inc.
) is scheduled to release its fourth quarter 2011 results on
Wednesday, January 25, after the closing bell. The current Zacks
Consensus Estimate for the fourth quarter is pegged at 65 cents,
representing an annualized growth of 18.42%.
With respect to earnings surprises over the trailing four
quarters, Citrix Systems has outperformed the Zacks Consensus
Estimate in all the four quarters. The average earnings surprise
was a positive 12.83%, implying that the company has outdone the
Zacks Consensus Estimate by the same magnitude during the same
Third Quarter Recap
On October 27, 2011, Citrix Systems reported its third quarter
2011 financial results.
Quarterly net revenue was $565.3 million, up 20% year over year
and ahead of the Zacks Consensus Estimate of $545 million. GAAP net
income was $92.2 million or 49 cents per share compared with $87.8
million or 46 cents per share in the prior-year quarter. However,
quarterly adjusted EPS of 64 cents was well above the Zacks
Consensus Estimate of 46 cents.
Gross margin in the third quarter of 2011 was 86.4% compared
with 87.8% in the year-ago quarter. However, quarterly operating
margin was 18.5% compared with 17.3% in the prior-year quarter.
Agreement of Estimate Revisions
In the last 30 days, out of the 15 analysts covering the stock,
one analyst increased the estimate for the fourth quarter of 2011
while none reduced the estimates. However, for the first quarter of
fiscal 2012, only one analyst reduced the EPS estimate.
For fiscal 2011, in the last 30 days, out of the 15 analysts
covering the stock, one analyst increased the EPS estimate but none
decreased the same while for fiscal 2012, out of the 15 analysts
covering the stock, one analyst raised the EPS estimate and one
slashed the estimate.
Magnitude of Estimate Revisions
During the last 30 days, the current Zacks Consensus Estimates
were in line with the previous estimates of 65 cents and 44 cents,
respectively, for the ongoing quarter and the first quarter of
However, for fiscal 2011, during the last 30 days, the current
Zacks Consensus Estimate was just a penny short of the earlier
estimate of $2.09. For fiscal 2012, the current Zacks Consensus
Estimate was a penny above the previous estimate of $2.33.
The current Zacks Consensus Estimates for the ongoing quarter
reflects a 0.00% upside potential but the upcoming quarter contains
a 2.22% downside potential (essentially a proxy for future earning
surprises). Similarly, fiscal 2011 has a 0.00% upside potential
while for 2012, the Zacks Consensus Estimate reflects a 1.28%
Strong financial outlook, increased demand for desktop
virtualization led by XenDesktop and other new product launch will
propel growth for the company going forward. However, deteriorating
economy coupled with stiff competition from
) will act as a headwind for the company going forward. We, thus,
maintain our long-term Neutral recommendation for Citrix
Currently, Citrix Systems has a Zacks #3 Rank, implying a
short-term Hold rating on the stock.
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