Earnings Preview: BMC Inc. - Analyst Blog
30 Gennaio 2012 - 6:53PM
Zacks
BMC Inc. (BMC) is scheduled to announce its
third quarter 2012 results on February 1, 2012 and we do not see
much variation in the analysts’ estimates at this point.
Second Quarter Overview
The company reported second quarter 2012 earnings per share of
75 cents, surpassing the Zacks Consensus Estimate of 71 cents.
Total revenue of $556.7 million in the reported quarter
increased 10.8% year over year. During the quarter, BMC witnessed a
number of deal wins pertaining to cloud technology. Moreover, the
company currently has a strong line up of new cloud deals.
Another strategic imperative on the company’s part is to become
the leader in Software-as-a-Service (S-a-a-S) management. The
company added a number of new SaaS customers during the quarter and
the related amount of subscription annual contract value (ACV)
exhibited strong growth.
Operating income on a GAAP basis came in at $161.0 million, up
12.2% year over year from $143.5 million. The company witnessed
substantial reduction in R&D expenses, along with some
reduction in selling, general & administrative expenses.
Moreover, BMC Software generated $161.7 million in cash flow
from operations in the reported quarter, up from $127.1 million in
the previous quarter. The company exited the quarter with cash and
investments of $1.46 billion, down from $1.58 billion in the prior
quarter.
For fiscal 2012, BMC Software expects non-GAAP diluted earnings
per share in the range of $3.21 to $3.31 per share. At the
midpoint, this reflects a 9.0% increase over the fiscal 2011
non-GAAP EPS. This range includes approximately 2 cents of dilution
related to the company’s acquisition of Coradiant.
Agreement of Analysts
Out of the eight analysts providing estimates for the third
quarter, none revised their estimates over the last 30 days. While
for fiscal 2012 and 2013, one analyst each revised their estimate
downward over the last 30 days.
The static estimates primarily reflect the absence of any major
catalysts over the last 30 days. Consequently, the analysts are
also maintaining their outlook for the third quarter of
2012.
Analysts believe that currency will have a negative impact on
overall bookings and revenue. In light of which, management has
guided to a 1.0% dip in revenue and bookings for the third quarter
of 2012. Some analysts also expect that the weakness of the Euro
against the dollar has led to a 5.0% decline in revenues but a
3.25% gain on deferred revenue and bookings.
The company has a 50:50 ratio between domestic and international
revenue. This implies that currency could have an impact of 50 bps
to 100 bps over the next few quarters. BMC estimates currency to
have a 50 bps impact on FY2012 bookings and 50-70 bps impact on
FY2013 bookings.
Moreover, the analysts also believe that lower expenditure from
different government and private customers may weigh down the
overall business volumes of the company. The current economic
turmoil may also affect the business going forward.
Magnitude of Estimate Revisions
The magnitude of revisions is also minimal, since the company
reported its second quarter results. Overall, estimates for the
upcoming quarter have remained unchanged at 70 cents over the last
90 days. Again, estimates for fiscal 2012 and 2013, have gone down
by 1 cent, while the estimate of 2013 remained unchanged, over the
last 90 days.
Recommendation
BMC reported decent second quarter results. But the company may
witness a negative impact of currency on the total revenue and
bookings. Moreover, no real growth in deal activity and low
business prospects in the European region are factors working
against it.
Moreover, we are a bit apprehensive about growing competition
from big players such as International Business Machines
Inc. (IBM), Hewlett-Packard Company
(HPQ), EMC Corp. (EMC) and CA
Inc. (CA), which bundle hardware and software
offerings.
BMC currently holds a Zacks #4 Rank, which implies a short-term
Sell rating.
BMC SOFTWARE (BMC): Free Stock Analysis Report
CA INC (CA): Free Stock Analysis Report
EMC CORP -MASS (EMC): Free Stock Analysis Report
HEWLETT PACKARD (HPQ): Free Stock Analysis Report
INTL BUS MACH (IBM): Free Stock Analysis Report
To read this article on Zacks.com click here.
Zacks Investment Research
Grafico Azioni Xtrackers California Mun... (NASDAQ:CA)
Storico
Da Ago 2024 a Set 2024
Grafico Azioni Xtrackers California Mun... (NASDAQ:CA)
Storico
Da Set 2023 a Set 2024