* Q3 EPS ex-items 27 cents vs Street view 23 cents
* Q3 revenue $416.9 mln vs Street view $415.2 mln
* Sees Q4 EPS ex-items 19-24 cents vs Street view 25 cents
* Sees Q1 operating margin ex-items flat to slightly down
* Shares down 9.1 pct after-hours
(Adds CEO and analyst comment, background on margins; updates
By Ian Sherr
SAN FRANCISCO, Nov 17 Autodesk Inc (ADSK.O)
gave a fourth-quarter earnings outlook on Tuesday that was
lower than Wall Street expectations, and the software maker
said that its recovery could be hindered by continued job
losses in its core markets.
"Economies may be recovering in terms of GDP, but jobs are
still being lost and that is a key component to Autodesk's
recovery," Chief Executive Carl Bass said on the company's
quarterly conference call.
Autodesk relies on subscription-based sales, licensing its
software per user at a company.
The company's shares fell 9.1 percent in after-hours
The company, which makes the AutoCAD design software for
architects and designers, posted a third-quarter profit that
beat analysts' expectations.
Autodesk's operating margin for the third quarter was just
over 6 percent, compared with 23 percent at the same time last
Bass said that while the company could return to operating
margins of yesteryear, it has made a strategic decision to keep
from making too many cost cuts so as to take advantage of the
recovering economy as it happens.
"We've always said we can return to mid 20s to 30 percent
operating margin at almost any revenue level," he said. "We try
to get ahead of the downturn by making cuts early, but we want
to make sure we have the appropriate structure in place and the
appropriate resources as we go forward to make sure we can
really take advantage of this."
"We're very excited about the market position we have," he
added, "and we don't want to miss out on that when the recovery
Expense guidance got to investors, though, said Robert W.
Baird & Co analyst Steven Ashley.
"The focus by investors is going to be on expense guidance,
and the expense guidance going forward was simply higher than
anticipated," he said.
The company said it expects first quarter 2011 operating
margins, excluding items, to be flat to slightly down from the
previous year. The company attributed the decrease to normal
seasonality and the return of certain costs that were
suppressed in the year-ago period.
Pacific Crest Securities analyst Brendan Barnicle said the
stock's after-hours fall was best attributed to expectations of
investors, which may have outpaced what companies can deliver.
This was similar, he said, to what happened to software
maker Salesforce.com Inc (CRM.N), which reported a slowdown in
new business on Tuesday. Its shares also fell. [ID:nN1739572]
Autodesk "blasted through their earnings, there's no doubt
about that," Barnicle said. "It's just that their guidance for
the next quarter isn't 5 cents above where the Street was
Autodesk forecast earnings per share, excluding items, for
the current quarter of 19 cents to 24 cents, on revenue of $420
million to $440 million. Analysts were looking for profit per
share of 25 cents on revenue of $433.5 million, according to
Thomson Reuters I/B/E/S.
Autodesk also said it would not forecast revenue for fiscal
2011, but did say it expects first quarter operating margins,
excluding items, to be flat to slightly down. Still, the
company saw "modest improvement" in non-GAAP operating margin
for fiscal 2011 compared with the previous year.
Net income for the third quarter fell to $29.5 million, or
13 cents a share, in Autodesk's fiscal third quarter ended Oct.
31, from $104.5 million, or 45 cents a share, in the year-ago
Excluding items, profit was 27 cents a share, ahead of the
average analyst estimate of 23 cents a share, according to
Thomson Reuters I/B/E/S.
Revenue fell 31 percent from a year earlier to $416.9
million, close to the average estimate of $415.2 million.
The San Rafael-based company's shares fell to $24.55 in
extended trading after closing on the Nasdaq down 1.6 percent
(Reporting by Ian Sherr; editing by Andre Grenon and Carol