Citrix Systems Beats, Ups Guidance - Analyst Blog
April 28 2011 - 6:30AM
Zacks
Yesterday, after market
close,Citrix Systems Inc. (CTXS) declared
excellent financial results for the first quarter of 2011. Global
trends toward virtualization and cloud computing are facilitating
the company to post impressive results. Management raised its
financial forecast for full fiscal 2011. Furthermore, the Board of
Directors of Citrix has enhanced its share repurchase program by
$500 million. As a result, in the after market trade on NASDAQ,
share price of Citrix System was up $4.93 (6.33%) to $82.76.
Quarterly net revenue was $490.9
million, up 18% year over year and was well ahead of the Zacks
Consensus Estimate of $475 million. GAAP net income was $73.5
million or 38 cents per share compared with a net income of $47.3
million or 25 cents per share in the prior-year quarter. However,
quarterly adjusted EPS of 41cents was significantly above the Zacks
Consensus EPS estimate of 32 cents.
Gross margin in the first quarter
of 2011 was 88.3% compared with 88.2% in the year-ago quarter.
Operating expenses in the reported quarter were around $352.6
million compared with $313.5 million in the prior-year quarter.
However, quarterly operating margin was 16.5% compared with 12.6%
in the prior-year quarter.
During the first quarter of 2011,
Citrix repurchased 1.6 million of its common outstanding shares for
around $110.4 million. At the end of the reported quarter, deferred
revenue was $789 million, up 24.1% year over year.
During the first quarter of 2011,
Citrix generated over $159.2 million of cash from operations and
free cash flow (cash flow from operations less capital
expenditures) during the reported quarter was approximately $130.5
million. At the end of the first quarter of 2011, the company had
above $1,638.8 million of cash and marketable securities compared
with $1,685.6 billion at the end of fiscal 2010. Balance sheet
remains free of any debt obligations.
Revenue by Product
Mix
Product Licenses revenue was $150.3
million, up 22% year over year. License updates revenue was $177.9
million, up 9% year over year. Online Services revenue was $99.8
million, an increase of 17% over the prior-year quarter, and
Technical Services revenue was $63 million, up 44% year over
year.
Revenue by Reportable
Segment
Enterprise Division revenue was
$391.1 million, down 10.1% sequentially. Online Services Division
revenue was $99.8 million, up 5.3% sequentially.
Revenue by Product
Grouping
Desktop solutions revenue was
$289.1 million, up 13% year over year. Data Center and Cloud
Solutions revenue was $77.7 million, up 33.5% year over year.
Online Services revenue was $99.8 million, up 17.4% year over year.
Revenue from Other Products was $24.3 million, up 59.9% year over
year.
Revenue by
Geography
Revenue in the Americas (North
& Latin America) region was $217.5 million, up 22% year over
year. Revenue in Europe, Africa, and the Middle East region was
$133.4 million, up 12% year over year. Revenue in the Asia Pacific
region was $40.3 million, up 25% year over year. Citrix Online
Services revenue was $99.8 million, up17.4% over the prior-year
quarter.
Second Quarter of 2011
Financial Outlook
Management forecasted that the
company’s second-quarter 2011 revenue will be within the range of
$515 million - $525 million. GAAP EPS will be within the range of
41 cents - 42 cents and non-GAAP EPS will be between 54 cents – 55
cents. Stock-based compensation expenses will be 12 cents per
share.
Full Fiscal 2011 Financial
Outlook
Management forecasted that the
company’s fiscal 2011 revenue will be within the range of $2.14
billion - $2.17 billion. GAAP EPS will be within the range of $1.91
- $1.94 and non-GAAP EPS will be within the range of $2.38 - $2.41.
Stock-based compensation expenses will be 44 cents per share.
Our
Recommendation
We believe the virtualization
market will continue to flourish with desktop virtualization as its
core theme. This will sustain future growth of both Citrix and its
major competitor VMware Inc. (VMW). We maintain
our long-term Neutral recommendation for Citrix Systems. Currently,
it holds a short-term Zacks #3 Rank (Hold) on the stock.
CITRIX SYS INC (CTXS): Free Stock Analysis Report
VMWARE INC-A (VMW): Free Stock Analysis Report
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