MCRS (MM)

MICROS Systems Inc.’s (MCRS) Non-GAAP earnings per share for the third quarter of fiscal 2012 came in at 56 cents compared with 49 cents in the prior-year quarter and 51 cents in the earlier quarter. This substantially surpassed the Zacks Consensus Estimate of 48 cents.

On a GAAP basis, earnings came in at 53 cents per share, versus 47 cents in the prior-year quarter as well as prior quarter.

Revenues

Revenues were $278 million, up 9.8% year over year and 2.8% sequentially. This was exactly in line with the Zacks Consensus Estimate.

On a segment basis, Service revenues came in at $177.4 million, rising from $172.2 million, going up 3.0% from the previous year quarter. Hardware revenues came in at $63.1 million, increasing 26.5% from the year-ago quarter. Software revenues came in at $37.6 million, up 20.9% year over year.

Margins

Gross margin came in at 54.9% compared with 55.8% in the year-ago quarter and 56.3% in the last quarter. Operating margin came in at 20.1% versus 20.5% in the previous year period, but remained stable sequentially.

Balance Sheet

At the end of the quarter, cash and cash equivalents amounted to $816.0 million, rising 10.3% from $739.5 million at the end of the earlier quarter. Inventory fell around 1.6% to $36.7 million from $37.3 million in the prior quarter. Accounts payable surged 7.2% to $53.7 million at the end of the quarter from $50.1 million at the end of December 31, 2011.

Our Take

A number of contract wins and extensions were earned by the company during its third quarter, which were chiefly responsible for the escalated revenue growths. We are also hopeful that these long-term awards will continue to generate approbatory yields for MICROS as it moves ahead to battle the lingering downsides of the on-going clouded fiscal scenario.

The company currently retains a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. We also maintain a long-term ‘Neutral’ recommendation on the stock.

 
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