MICROS Posts Decent 3Q - Analyst Blog
April 29 2013 - 5:28AM
Zacks
MICROS Systems Inc.(MCRS) reported adjusted
earnings per share (“EPS”) of 58 cents for the third quarter of
fiscal 2013. This exceeded the Zacks Consensus Estimate and 8.6%
higher than the year-ago quarter.
Revenues
Revenues were $315.1 million, up 13.3% year over year. Barring
the Torex acquisition in May 2012, revenues for the company
declined 4.0% on a reported basis.
Segment-wise, service revenues came in at $213.7 million, rising
20.5% from $177.4 million in the previous-year quarter. Hardware
revenues came in at $64.5 million, increasing 2.3% from the
year-ago quarter. Software revenues came in at $36.8 million, down
2.0% year over year, as software sales were affected while retail
sales was higher.
Operating Results
Reported gross margin was 52.5%, down from 54.9% in the year-ago
quarter. The year- over-year decline was due to the low margin
Torex business. After taking into account the company’s new Torex
customers and the legacy outsourcing contracts in the second half
of calendar 2014, the company anticipates Torex margins to
increase.
Selling, general and administrative expenses came in at $78.3
million, increasing 3.0% from the year-earlier quarter. Research
and development expenses amounted to $18.0 million, up 33.9% year
over year. Operating margin dropped 162 basis points year over year
to 18.5%.
On a GAAP basis, earnings came in at 55 cents per share versus
53 cents in the year-ago quarter. Adjusting one-time items and
including stock-based compensation expenses, non-GAAP earnings were
57 cents versus 53 cents in the year-ago quarter.
Balance Sheet
MICROS ended the quarter with cash and cash equivalents and
short-term investments of $669.3 million versus $631.8 million at
the end of the previous quarter. Receivables increased 10.8%
sequentially to $238.7 million. Inventory increased 3.5% from the
prior quarter to $54.5million.
Share Repurchase
The company spent around $37.5 million on repurchase of shares,
thereby buying back 861,000 shares with an average price of $43.59
per share. Moreover, during the fourth quarter, MICROS has
repurchased 164,000 shares of common stock for a total price of
$7.3 million.
Guidance
As per the current estimation, MICROS has projected its fiscal
2013 revenue guidance in the range of $1.256 billion and $1.272
billion, while the non-GAAP EPS is expected to hover in the range
of $2.37 to $2.39, this would result in a fourth quarter revenue of
between $317.0 million and $333.0 million, while the non-GAAP EPS
for the same quarter is expected to be between 61 and 63 cents.
Our Take
MICROS third-quarter results were modest, with EPS exceeding the
Zacks Consensus Estimate, while revenues increasing on a
year–over–year basis. The company is expected to take care of its
margin position and control expenses. The revenue guidance for
fiscal 2013 is at a decent range which projects some improvement in
business.
Although MICROS has a decent cash position and providing
valuable solutions to Apple Inc.’s (AAPL) iPad, we
remain concerned due to increasing competition from innovative
(tablet-based) Point-of-Sales (POS) solutions by its peers Square,
Revel, Groupon Inc. (GRPN) and NCR
Corp. (NCR).
Currently, MICROS has a Zacks Rank #3 (Hold).
APPLE INC (AAPL): Free Stock Analysis Report
GROUPON INC (GRPN): Free Stock Analysis Report
MICROS SYS (MCRS): Free Stock Analysis Report
NCR CORP-NEW (NCR): Free Stock Analysis Report
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