CHICAGO, May 19, 2011 /PRNewswire/ -- Zacks.com announces
the list of stocks featured in the Analyst Blog. Every day the
Zacks Equity Research analysts discuss the latest news and events
impacting stocks and the financial markets. Stocks recently
featured in the blog include: Dell Inc. (Nasdaq: DELL),
Autodesk Inc. (Nasdaq: ADSK), Adobe Systems Inc.
(Nasdaq: ADBE), Parametric Technology Corp. (Nasdaq: PMTC)
and Avid Technology Inc. (Nasdaq: AVID).
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Here are highlights from Wednesday's Analyst Blog:
Dell Exceeds Expectations
Dell Inc. (Nasdaq: DELL) delivered first quarter fiscal
2012 EPS of 55 cents, handily beating
the Zacks Consensus Estimate of 43
cents.
Revenues
Revenues for the first quarter were $15.0
billion, up 1.0% from $14.9
billion reported in the year-ago quarter. Revenue growth was
driven by an improvement in the company's Enterprise Solutions and
Services.
Moreover, the company also witnessed decent growth in several
key areas this quarter like the Small and Medium Business, the
Asia-Pacific and Japan, and the company's Server business was
particularly strong. The overall revenue remained below the
company's expectation, as Dell witnessed slower growth from its
Consumer business and some weak sales in the Public sector.
Revenue by Segments
Large Enterprise posted revenue of $4.5 billion, up 5.0% year over year.The
improvement in revenue was led by the ongoing hardware refresh.
Client revenue was up 7.0% and server growth was up 6.0%.
Overall, Client hardware revenues fell 2.0% to $8.0 billion, driven by weakness in Public and
Consumer.
Public revenues in the quarter were $3.8 billion, down 2.0% from the year-ago
quarter. The company continues to witness budget cuts, which
dampened spending on the client refresh. However, budget cuts had
the opposite effect on server consolidation, virtualization and
efficient IT services, which can drive structural cost reduction
for customers given the financial challenges they're facing.
Small and Medium Business revenues were $3.8 billion, up 7.0% from the year-ago quarter.
Revenue was at the highest levels in the last 2 years, driven by
strong demand across all product lines. Server and Storage revenues
were up 19.0% and 7.0% respectively, while hardware revenue from
the segment grew 1.0%.
Consumer Business revenues decreased 7.0% to $3.0 billion. The company is experiencing above
average seasonality due to good demand for Dell's Sandy Bridge based offerings, which are now
widely available, good consumer spending and a refreshed portfolio
of XPS products.
Total sales from the BRIC countries (Brazil, Russia, India
and China), which accounted for
27.0% of Dell's quarterly revenue, increased strongly by
approximately 18.0%.
Guidance
Dell expects mid-single digit revenue growth in its second
quarter and expects fiscal 2012 revenue growth of 5% - 9% and an
increase in non-GAAP operating income growth to 12%-18%.
Our Take
Dell reported decent first quarter numbers, with earnings per
share (EPS) and revenues moving up from the year-ago quarter. New
products, a stronger services business, opportunities in the
Electronic Medical Record sector, along with the introduction of
Dell Streak were the achievements for the previous year.
Earnings Preview: AutoDesk
Autodesk Inc. (Nasdaq: ADSK) is scheduled to announce its
first quarter 2012 results on May 19,
2011. We do not see any major variation in analysts'
estimates in the run-up to the earnings report.
Prior Quarter Recap
Autodesk reported fourth quarter 2011 earnings of 27 cents per share, in line with the Zacks
Consensus Estimate. Earnings per share (EPS), including stock-based
compensation but excluding one-time charges, increased 22.7% year
over year, primarily driven by strong revenue growth.
Revenues increased 16.0% year over year to $528.0 million in the fourth quarter. This was
above the Zacks Consensus Estimate of $515.0
million, as well as management's guided range of
$500.0 million to $520.0 million. The
company witnessed a rebound in demand for its software solutions in
fiscal 2011.
The year-over-year growth was driven by higher license and other
segment revenues.
For further details please refer to: Autodesk Matches Earnings
Estimate
Current Quarter Expectations
For the first quarter of 2012, Autodesk expects revenues in the
range of $510.0 million to $525.0
million. As per the Zacks Consensus, Autodesk is estimated
to earn revenues of $522.0
million.
GAAP EPS is expected in the range of 21
cents to 24 cents. Non-GAAP EPS is expected in the
34 cents to 37 cents range for the
quarter. The Zacks Consensus Estimate is currently pegged at
31 cents per share for the first
quarter of 2012, below the guided range.
For fiscal 2012, Autodesk expects revenue to increase 10.0% year
over year. Non-GAAP operating margin is expected to increase 200
basis points on a year-over-year basis. However, the company did
not provide any EPS guidance for the full year. The current Zacks
Consensus Estimate is pegged at $1.40
per share for fiscal 2012.
The outlook provided by the company includes the impact of two
acquisitions (Scaleform Corp and Blue Ridge Numerics), which were
closed during the first quarter of 2012. However, the Blue Ridge
Numerics acquisition is not expected to impact first quarter
results, so the guidance remains unchanged following the
announcement.
Estimate Revision Trend
For the current quarter, out of the seven analysts covering the
stock, only one analyst raised estimates while none moved in the
opposite direction over the last thirty days.
For fiscal 2012, three analysts raised their estimates in the
last thirty days, one of which was made in the last seven days.
Hence, the EPS estimate inched up from $1.39
to $1.40.
The analysts believe that the company is well positioned to
benefit from an improving macro environment and fundamental
improvements in the business, which is evident from a recovery in
new license sales that would occur in conjunction with global
recovery.
The analysts also believe Autodesk is gaining market share and
its presence in the emerging markets will drive top-line and
bottom-line growth going forward.
Conclusion
Autodesk posted a positive average earnings surprise of 43.75%
in the trailing four quarters, implying that the company either
beat or was in line with the Zacks Consensus Estimate over the same
period. The company is also expected to post another positive
surprise in the next quarter.
In our view, the company's improvements and innovations in 3D
design technology and product portfolio provides Autodesk a
competitive edge. These innovations enable Autodesk to stay ahead
of competitors like Adobe Systems Inc. (Nasdaq: ADBE),
Parametric Technology Corp. (Nasdaq: PMTC) and Avid
Technology Inc. (Nasdaq: AVID).
Over the long term, we remain optimistic on the stock and have
an Outperform recommendation, given positives such as Autodesk's
operating margin leverage and strong revenues, stability in its end
markets, the increased demand for 3D products, expanding market
share, a diversified product pipeline, cost control and strategic
acquisitions. However, foreign exchange fluctuations remain a
headwind.
Currently, Autodesk has a Zacks #2 Rank, which translates into a
short-term (1-3 months) Buy rating.
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