Citrix Systems Inc.
) declared mixed financial results for the third quarter of 2012.
GAAP net income, in third-quarter 2012, was $78.2 million or 41
cents per share compared with $92.2 million or 49 cents per share
in the prior-year quarter. Quarterly adjusted earnings per share
of 53 cents were well above the Zacks Consensus Estimate of 49
cents. Third-quarter net revenue was $641.4 million, up 13.5%
year over year but fell below the Zacks Consensus Estimate of
Nevertheless, the company's financial guidance for the ensuing
fourth quarter was weak. Despite this, in the after market trade
on NASDAQ, the stock price of Citrix raised $1.11 (1.73%) to
$65.19. Just a few days ago, Citrix's major competitor,
) maintained its previously given outlook for fiscal 2012.
Gross margin in the third quarter of 2012 was 83.5% compared
with 85.9% in the year-ago quarter. Operating expenses in the
reported quarter were around $452.9 million compared with $381
million in the prior-year quarter. Quarterly operating margin was
12.9% compared with 18.5% in the prior-year quarter. At the end
of the previous quarter, deferred revenue was $1,050 million, up
25.9% year over year. In the reported quarter, Citrix repurchased
1 million of its common shares for a total consideration of $76.3
During the third quarter of 2012, Citrix generated over $181
million of cash from operations and free cash flow (cash flow
from operations less capital expenditures) during the reported
quarter was approximately $145 million. At the end of the third
quarter of 2012, the company had nearly $1,406.3 million of cash
and marketable securities compared with $1,477.6 million at the
end of 2011. Balance sheet remains free of any debt
Revenue by Product Mix
Product and Licenses revenue was $195.6 million, up 0.9% year
over year. License updates and maintenance revenue was $285.1
million, up 19.4% year over year. Software as a Service revenue
was $129.7 million, an increase of 18.3% over the prior-year
quarter, and Professional Services revenue was $31 million, up
33.7% year over year.
Revenue by Product Grouping
Desktop solutions revenue in the second quarter of 2012 was
$348.6 million, up 10.3% year over year. Data Center and Cloud
Solutions revenue was $127.5 million, up 14.7% year over year.
Online Services revenue was $129.7 million, up 18.3% year over
year. Revenue from Other Products was $35.7 million, up 24.4%
year over year.
Revenue by Geography
Revenue in the Americas (North & Latin America) region was
$391.8 million. Revenue in Europe, Africa, and the Middle East
region was $180.1 million. Revenue in the Asia Pacific region was
Fourth Quarter of 2012 Financial Outlook
Management forecasted that the company's fourth-quarter 2012
revenue will be within the range of $700 million to $710 million.
GAAP earnings per share will be within the range of 55 cents to
57 cents and non-GAAP earnings per share will be between 83 cents
and 85 cents. Stock-based compensation expenses will be 22 cents
Initial Outlook for Fiscal 2013
Management has expected that the company's fiscal 2013 revenue
will grow 14% year over year and its non-GAAP operating margin
will be expanded by 0.5% year over year.
We maintain our Neutral recommendation on Citrix Systems.
Currently, it holds a short-term Zacks #4 Rank (Sell) on the
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