Citrix Systems Inc.
(
CTXS
) 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
$651 million.
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,
VMware Inc.
(
VMW
) 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
million.
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
obligations.
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
$69.5 million.
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
per share.
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.
Our Recommendation
We maintain our Neutral recommendation on Citrix Systems.
Currently, it holds a short-term Zacks #4 Rank (Sell) on the
stock.
CITRIX SYS INC (CTXS): Free Stock Analysis
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