Autodesk Swings To Loss; Cuts Outlook Again

(RTTNews) - Design software maker Autodesk, Inc. (ADSK) said Thursday after the markets closed that it swung to a second quarter loss, hurt by lower revenue and a hefty tax charge.

However, the company's quarterly earnings per share, excluding items, came in above analysts' expectations, but its quarterly revenue fell short of analysts' forecast.

At the same time, the company gave a disappointing outlook for the current quarter and once again lowered its full year forecast.

"Looking at the second half of this fiscal year we are maintaining our billings and subscriptions outlook but we're now expecting a greater portion of our sales to shift from perpetual licenses to new subscription types," said Scott Herren, Autodesk Chief Financial Officer. "Since the revenue from these new subscription types is deferred and recognized ratably we have revised our revenue, operating margin and EPS outlook for the year."

Separately, Autodesk said it has agreed to buy SeeControl, a San Francisco-based developer of an enterprise Internet of Things cloud service platform. Terms of the deal were not disclosed. The deal, which is expected to close during Autodesk's current quarter, is expected to have no impact on the company's guidance issued today.

Autodesk shares are currently losing 5.00% in after hours trading after closing the day's regular trading session at $50.00, up 87 cents or 1.77%. The shares trade in a 52-week range of $46.77 to $65.00.

For the second quarter ended July 31, 2015, the San Rafael, California-based company reported a net loss of $235.5 million or $1.04 per share, compared to net income of $31.3 million or $0.13 per share for the year-ago quarter.

In the second quarter of 2015, Autodesk recorded a non-cash tax charge of $214 million to establish a valuation allowance on certain U.S. deferred tax assets.

Excluding items, adjusted net income for the second quarter was $44.0 million or $0.19 per share, compared to $82.0 million or $0.35 per share in the prior year quarter.

On average, 16 analysts polled by Thomson Reuters expected the company to earn $0.17 per share for the second quarter. Analysts' estimates typically exclude special items.

Operating margin for the quarter narrowed to 1% from 8% a year earlier, while adjusted operating margin shrank to 11% from 18% last year.

Net revenue for the second quarter fell 4% to $609.5 million from $637.1 million in the same quarter last year. Fourteen analysts had a consensus revenue estimate of $612.42 million for the second quarter.

Revenue from Flagship products fell 11% from last year to $272 million, while revenue from Suites declined 3% to $226 million in the second quarter.

Total billings for the quarter increased 7% year-over-year. Total subscriptions increased by about 61,000 from the previous quarter to end at the second quarter at 2.39 million.

The company's deferred revenue at the end of the second quarter was $1.2 billion, an increase of 26% from a year earlier.

Looking forward to the third quarter, the company forecasts revenue of $580 million to $600 million, a net loss of $0.23 to $0.18 per share and adjusted earnings of $0.05 to $0.10 per share. Analysts currently expect the company to earn $0.24 per share on revenue of $628.27 million for the third quarter.

For the full year fiscal 2016, the company now expects revenue of $2.465 billion to $2.505 billion, a loss of $1.39 to $1.27 per share and adjusted earnings of $0.60 to $0.72 per share. Previously, the company expected revenue growth of 2% to 4%, earnings of $0.00 to $0.15 per share and adjusted earnings of $0.95 to $1.10 per share.

Analysts currently expect the company to earn $1.04 per share on revenue of $2.59 billion for the full year.