|Last QTR vs.
|Dassault (€)||€ 27.000||€ 28.200||-4.3%||Ueuro; 22.000||22.7%|
|EDS PLM (est.)||Earnings for PLM Solutions are not reported by EDS|
|ESI Group (€)||Earnings Not Offered|
|ESI Group ($)||...||...||...||...||...|
Figure 2 -- Nine Public MCAD Companies' Latest Quarterly Earnings Performances
(Millions; U.S. $ except as indicated)
Four of the seven companies reporting earnings did somewhat better sequentially this quarter, while three did worse, as seen in Figure 2. Thanks to Autodesk's and MSC's improvements, the totals went from slightly red to slightly black for the seven companies reporting earnings quarter over quarter. Still, total sector profits of 3.7% on sales is not so hot.
Details for each company's recent quarterly revenues and earnings are provided below:
ANSYS reported results for the quarter that exceeded analysts' expectations for the 24th straight quarter. Total revenue was $28.0M, as compared to $21.7M (+29%) in the third quarter of 2002 but only up 1.3% from the previous quarter. ANSYS reported net income for the third quarter of $5.4M, or $0.33 diluted earnings per share. This compares to $4.8M (+11.6%) in 3Q02 and $4.5M (+19%) the previous quarter.
Comparison with last year's financial results is difficult due to the acquisition of CFX in February 2003 for $22M in cash. ANSYS pointed out that it incurred an $885K charge in the quarter due to an accounting adjustment for acquired deferred revenue. Product and personnel from the CFX acquisition also contributed to increased expenses. For example, CFX has a higher direct sales component. Of course, CFX products and service also contributed to increased revenue. Prior to being acquired CFX had been averaging revenue of $4.75M a quarter as reported for the fiscal year ending March 31, 2002. During the Q&A portion of quarterly conference call, ANSYS said that CFX contributed ~$5M in revenue for the quarter. This means that ANSYS core revenue growth without CFX would have been around 5% in the quarter.
ANSYS President and CEO, Jim Cashman, commenting on the current quarter's solid business performance, said, "The third quarter was a very positive quarter for us on a number of important initiatives. We continued to make tremendous strides in integrating our recently acquired CFX product line, which contributed to our ability to post record third quarter revenue and earnings results. Additionally, we made important progress in advancing our leadership in technology, which we believe has been a key driver to both the continued penetration into our extensive installed base, as well as our ability to expand into new markets."
During the quarter ANSYS announced a $5M deal with Siemens. The three-year contract includes more than 200 seats of ANSYS software as well as seats from the ANSYS ICEM CFD Product Suite and services. At the end of October, ANSYS announced the release of ANSYS 8.0, its CAE simulation software platform.
On August 22nd Autodesk reported for the quarterly period ending July 31. "We are pleased with the company's performance," said Carol Bartz, Autodesk chairman and CEO. "As we said last quarter, the AutoCAD 2004 family of products is the strongest in the company's history and our customers continue to affirm this. The strength of our offerings is demonstrated by increased upgrade revenues and subscriptions momentum during the quarter. As a result, the percentage of users who have upgraded has never been higher at this point in a cycle." Revenue was flat both sequentially and year over year. Growth rate in the high teens by Europe compensated for revenue drops (~9%) in the Americas and in Asia. Revenue for Manufacturing Solutions (Inventor, Mechanical Desktop) was $29M, down versus $30M the previous quarter and $34M the previous year. There was a more than a 400% improvement in Autodesk's Net Income and EPS; however, this was mostly due to a one-time tax-benefit. On a Pro forma basis net income would actually have dropped year over year from $14.5M to $12.5M.
Dassault Systemes (DS) reported a small sequential drop in revenue and earnings (3% to 4%) but considerable growth in net income and earnings of about 25% year-over-year due to a 3 percentage-point improvement in operating margin. DS is the only major MCAD vendor reporting in Euros. This masks the strong performance in Americas (+8% sequentially and +14% YTD) and in Asia (+17% sequentially and +8% YTD) in local currencies. When reported in terms of constant currency total revenue was up 7% Year over year. Per Thibault de Tersant, Vice President and CFO "Software revenue growth was in-line with our expectations, increasing 9% in constant currencies. .. earnings were solid, coming in ahead of our expectations. Services, however, did not meet our expectations, resulting in total revenue approximately EUR4 million lower than our objective when adjusted for actual currency rates." During the quarter the French Government sold their remaining 16% equity share so that company's free float is now 48%. Also DS invested ~$2M in newly formed Gehry Technologies (GT), who will deliver a suite of products dedicated to the building industries and will sell and service IBM/DS' PLM software. Frank Gehry is the world famous architect who designed the just opened Walt Disney Concert Hall in Los Angeles.