MCAD/MCAE Industry View – A November 2010 Update


ANSYS also reported GAAP net income of $36.1 million in the third quarter of 2010, plus 18.4% as compared to $30.5 million in the third quarter of 2009; and GAAP net income of $ 35.5 million in sequential Q2 2010, up only 1.7% sequentially. However, GAAP net income was $104.0 million in the first nine months of 2010 as compared to $78.8 million in the first nine months of 2009, a healthy nine months' YTD percentage of plus 32%.

As a result, GAAP diluted earnings per share were $0.39 in the third quarter of 2010 as compared to $0.33 in the third quarter of 2009, and to $0.38 in sequential Q2 2010. GAAP diluted earnings per share was $1.12 in the first nine months of 2010 as compared to $0.86 in the first nine months of 2009. The $0.39 EPS in Q3 2010 was 2 cents above the top of the $0.34 to $0.37 guidance range provided three months ago.


Commentary Concerning Impact of Subsidiary Merger Activities


To improve the effectiveness of the Company's operations in Japan, during the third quarter of 2010, the Company completed the merger of its Japan subsidiaries. The income tax effect of this merger transaction is expected to have a significant impact on the Company's net income, diluted earnings per share and cash flows in future periods.

During the third quarter of 2010, the Company's operating cash flow was increased by approximately $11 million related to a reduction in income taxes paid. The merger transaction did not impact the Company's net income or diluted earnings per share in the third quarter of 2010.

The Company expects the merger transaction to impact its cash flows, net income and earnings per share as follows:

Fourth Quarter 2010 Cash Flow: Negative impact of $58 to $63 million
Fourth Quarter 2010 Net Income: Positive impact of $1.9 - $2.0 million
Fourth Quarter 2010 Diluted EPS: Positive impact of $0.02

2011 Cash Flow: Positive impact of $38 to $42 million
2011 Net Income: Positive impact of $7 to $8 million
2011 Diluted EPS: Positive impact of $0.07 to $0.08

The Company also expects that this transaction will positively impact cash flows and net income in 2012 - 2015.

Management's Remaining 2010 and Preliminary 2011 Financial Outlook

The Company is providing its 2010 revenue and earnings per share guidance below, as well as its preliminary outlook for 2011.

Fourth Quarter 2010 Guidance

The Company currently expects the following for the quarter ending December 31, 2010:

  • Revenue in the range of $157 - $163 million
  • GAAP diluted earnings per share of $0.44 - $0.48

Fiscal Year 2010 Guidance

The Company currently expects the following for the fiscal year ending December 31, 2010:

  • Revenue in the range of $570.7 - $576.7 million
  • GAAP diluted earnings per share of $1.56 - $1.60

Fiscal Year 2011 Preliminary Outlook

The Company currently expects the following for the fiscal year ending December 31, 2011:

  • Revenue in the range of $635 - $660 million
  • GAAP diluted earnings per share of $1.76 - $1.89

These statements are forward-looking and actual results may differ materially.



ANSS    11/24/10 CLOSE = $ 48.99       MKT CAP = $4.45 B
  
NASDAQ   11/24/10 CLOSE = $2543.12

 

ANSYS, Inc. self-description

ANSYS, Inc., founded in 1970, develops and globally markets engineering simulation software and technologies widely used by engineers, designers, researchers and students across a broad spectrum of industries and academia. The Company focuses on the development of open and flexible solutions that enable users to analyze designs directly on the desktop, providing a common platform for fast, efficient and cost-conscious product development, from design concept to final-stage testing and validation. The Company and its global network of channel partners provide sales, support and training for customers. Headquartered in Canonsburg, Pennsylvania, U.S.A., with more than 60 strategic sales locations throughout the world, ANSYS, Inc. and its subsidiaries employ over 1,600 people and distribute ANSYS products through a network of channel partners in over 40 countries. Visit www.ansys.com for more information.


On November 18, 2010 Autodesk, Inc. (NASDAQ:ADSK) reported financial results for its third quarter of fiscal 2011, aka nominal Q3 2010 for purposes of this MCAD/MCAE Commentary for November 2010.

Autodesk revenue growth in the quarter was said to be well balanced with all top countries growing year-over-year. Going forward, the company is said to be optimistic about its ability to grow revenue and profitability, though it continues to be pragmatic about the pace of the global macroeconomic recovery.

  • Q3 2010 revenue was $477 million, a year over year increase of 14% compared to nominal Q3 2009, but less than a 1% improvement compared to sequential Q2 2010.
  • Nine months YTD revenue this year was $1424.1 million or 15.1% ahead of nine months YTD last year of $1257.6 million.
  • GAAP operating margin was 15%, compared to 6% in the third quarter a year ago, but it was down from 17% in the just prior second quarter.
  • GAAP Net Income was $53.6 million, a year over year increase of 81.7% compared to $29.5 million in the third quarter a year ago, but down $6.4 million or 10.7% from $60 million in sequential Q2 2010.
  • Nine months GAAP Net Income this year is $150.4 million, compared to only $7.9 million after 9 months last year.
  • GAAP diluted earnings per share in Q3 2010 were $0.23, compared to GAAP diluted earnings per share of $0.13 in the third quarter last year, but less than GAAP diluted earnings per share of $0.25 in sequential second quarter.
  • Cash flow from operating activities was $114 million, an increase of 145% compared to the third quarter of last year, and up 3% compared to the second quarter this year.



“We are pleased with our third quarter results, which reflect the solid progress we have achieved over the past year in driving revenue growth and improving profitability,"
said Carl Bass, Autodesk president and CEO. “We saw particular strength in our manufacturing business, which experienced strong demand on a global basis. We also delivered double digit year-over-year revenue growth in each of our geographies. Strong revenue coupled with tight cost controls led to a significant year-over-year improvement in profitability. Our relentless attention to building and selling great products allows us to serve our customers well and capitalize on a $14 billion market opportunity.”




“As a result of strong revenue growth and a focus on cost controls, for the year we expect to deliver significant improvement in key financial metrics, including revenue, operating margin, EPS, and cash flow from operating activities,”
said Mark Hawkins, Autodesk Executive Vice President, Chief Financial Officer. “Our revenue growth in the third quarter was well balanced with all of our top countries growing year-over-year. Going forward, we are optimistic about our ability to grow revenue and profitability, though we continue to be pragmatic about the pace of the global macroeconomic recovery.” (Hawkins joined Autodesk in April 2009).

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