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Citrix (CTXS) Down Despite Q4 Earnings & Revenues Beat

Citrix Systems Inc.CTXS posted encouraging results in the fourth quarter of 2016, with better-than-expected earnings and revenues.

The cloud computing company's earnings (excluded 17 cents from non-recurring items) came in at $1.43 per share, beating the Zacks Consensus Estimate by 13.5%. Better-than-expected revenues contributed to the earnings beat. Earnings, however, declined 2.05% from the year-ago figure.

Operating Results

Net revenue came in at $908.4 million, up marginally on a year-over-year basis and also above the Zacks Consensus Estimate of $898.8 million. Gross margin (adjusted) was 86.4% in the quarter under review compared with 85.8% in the prior-year quarter. Quarterly operating margin (adjusted) was 35.2% compared with 31.6% in the prior-year quarter. As of Dec 31, 2016, deferred revenues grossed $1.81 billion compared with $1.65 billion a year ago.

During the fourth quarter of 2016, Citrix generated approximately $259 million of cash from operations compared with $282 million for the same quarter in 2015. Citrix, which is on track to sell its GoTo business to LogMeIn, Inc. LOGM , exited the quarter with $957 million in cash and cash equivalents well above the year-ago figure. The abovementioned transaction is expected to close on Jan 31, after the market closes .

Revenues by Product Mix

Product and Licenses revenues grossed $255.3 million, down 9% year over year. License updates and maintenance revenues totaled $409.2 million, up 4% year over year. Software-as-a-Service (SaaS) revenues came in at $210 million, up 8% from the prior-year quarter. Professional Services revenues declined 8% to $33.9 million in the reported quarter.

Revenues by Geography

Net revenues in the Americas (both North & Latin America) decreased 1.2% year over year. While revenues in Europe, Africa and the Middle East region decreased by less than 1%, in the Asia-Pacific region it increased by less than 1% year over year.

Citrix Systems, Inc. Price, Consensus and EPS Surprise

Citrix Systems, Inc. Price, Consensus and EPS Surprise | Citrix Systems, Inc. Quote

Outlook for First-Quarter 2017

The company expects (excluding GoTo business) the net revenues in the band of $655 million to $665 million for the first quarter of 2017. Earnings per share (on an adjusted basis) are projected in the range of 93 cents to 95 cents. The Zacks Consensus Estimate for first-quarter revenues and earnings is $845.6 million and $1.06, respectively. It seems that the below-par view disappointed investors. Consequently, the stock declined in after-market trading on Jan 25, despite outperforming in the fourth quarter.

Outlook for 2017

The Fort Lauderdale, FL-based company expects (excluding GoTo business) net revenue in the band of $2.81 billion to $2.84 billion for 2017. The Zacks Consensus Estimate is $3.55 billion. Earnings per share (on an adjusted basis) are projected in the range of $4.60 to $4.65.

Zacks Rank & Key Picks

Citrix carries a Zacks Rank #3 (Hold).

Some better-ranked stocks in the Computer - Software industry include Exa Corp. EXA and Check Point Software Technologies Ltd. CHKP . Both Exa and Check Point Software sport a Zacks Rank #1 (Strong Buy). You can see the complete list of today's Zacks #1 Rank stocks here.

Exa Corporation develops, markets, sells, and supports software products, and provides professional services for simulation-driven design. The company has an excellent earnings surprise history, with an average beat of 68.1% for the trailing four quarters, having beaten estimates all through.

Check Point Software offers software and combined hardware products and services for IT security worldwide. This company posted positive earnings surprises thrice in the past four quarters with an average beat of 6%.

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LogMein, Inc. (LOGM): Free Stock Analysis Report

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Citrix Systems, Inc. (CTXS): 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 Nasdaq, Inc.


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

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