BMC Reports Decent 4Q - Analyst Blog
05 Mai 2011 - 7:17PM
Zacks
BMC Software Inc.
(BMC) reported fourth quarter 2011 earnings per
share of 64 cents, which missed the Zacks Consensus Estimate of 66
cents.
Revenue
Reported revenue of $562.0 million increased 14.0% year over
year. The company is witnessing a significant shift in customer
preference as major players in the IT industry are adopting cloud
computing solutions, SaaS or virtualization in order to upgrade
their existing infrastructure. With a clear focus on these
identifiable areas, the company has been able to drive sales.
BMC’s growth strategy seems to have been accretive as suggested
by improved bookings. Service automation, SaaS and cloud solutions
witnessed significant upside in customer demand.
License revenue was $250.6 million, up 24.5% from $201.3 million
reported in the year-ago quarter. Maintenance revenue increased
1.5% to $258.6 million versus $254.9 million in the year-ago
quarter. Professional services revenue rose to $53.0 million in the
reported quarter from the year-ago quarter level of $35.1
million.
Bookings
BMC’s total bookings in fiscal 2011 increased 13.0% from the
prior year, while fourth quarter bookings jumped 21.0% year over
year. Moreover, license bookings in fiscal 2011 grew 20.0% and in
the fourth quarter, it climbed 16.0% year over year.
ESM license bookings in the fourth quarter of 2011 and fiscal
2011 increased 18% and 21.0%, respectively. Total MSM bookings for
fiscal 2011 increased 4.0%.
Operating Results
Operating income on a GAAP basis was $141.8 million, up 22.8%
from $115.5 million reported in the year-ago quarter. Excluding
special items like severance cost and amortization of intangible
assets, but including stock-based compensation expense, non-GAAP
operating income was $166.8 million in the reported quarter, up
21.8% year over year from $136.9 million.
Net income on a GAAP basis was $122.5 million or 67 cents per
share compared with $118.8 million or 64 cents reported in the
year-ago quarter. Excluding special items such as amortization and
severance costs, but including stock-based compensation expense,
non-GAAP net income was $117.2 million or 64 cents per share
compared with $103.8 million or 56 cents reported in the year-ago
quarter.
Balance Sheet, Cash Flow & Share
Repurchase
BMC Software generated $290.4 million in cash flow from
operations in the fourth quarter, up from $180.3 million reported
in the previous quarter. The company exited the quarter with cash
and investments of $1.68 billion, up from $1.54 billion in the
previous quarter.
During the fourth quarter, the company continued with its
repurchase activity, spending $140.0 million to buy back 2.9
million shares. In fiscal 2011, BMC repurchased 10.6 million shares
for a total amount of $439.0 million. At the end of the year, the
company had $631.0 million remaining in its current share
repurchase program.
Guidance
For fiscal 2012, BMC expects non-GAAP diluted earnings per share
in the range of $3.21 to $3.31, reflecting a year-over-year
increase of 9% at the midpoint. BMC expects fiscal 2012 cash flow
from operations between $825 million and $875 million, reflecting
an 11.0% improvement at the midpoint.
Conclusion
BMC reported decent fourth quarter results. Moreover, the
company provided a positive outlook for fiscal 2012. Acquisitions
have expanded BMC’s product portfolio and further facilitating more
comprehensive solutions offering. Growth prospects in most of its
business segments, position in the government vertical and strong
cash generation abilities are other positives.
However, 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.
Currently, BMC has a Zacks #2 Rank, which translates into a
short-term Buy rating.
BMC SOFTWARE (BMC): Free Stock Analysis Report
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