Autodesk, Inc. Posts Market Beating Q4 Earnings But Much Worse Than Expected Q1 Earnings Outlook

Written by StockNews.com

Autodesk, Inc. (Nasdaq: ADSK) late Thursday [Mar 2, 2017 | 4:02pm] posted market beating fourth quarter earnings results, but its outlook was much worse than expected, and its shares sold off accordingly in aftermarket trading.

The San Rafael, CA-based design software giant reported Q4 adjusted EPS of ($0.28), which was $0.05 better than the Wall Street consensus estimate of ($0.33).

Revenues fell 26.1% from last year to $478.8 million, but still beat analysts’ view for $476.06 million.

Like many software firms, Autodesk is in the midst of radical a transformation of its business model away from a traditional downloadable software program with a one-time fee to a renewable subscription cloud-based model. In that vein, the company noted that “new model” subscriptions jumped by 227,000 sequentially, to 1.09 million. Meanwhile, total subscriptions grew to 3.11 million at the end of Q4.

Despite the solid subscription growth, Autodesk offered a first quarter and full-year outlook that badly missed expectations. For Q1, the company sees EPS of (0.27) to ($0.21), much worse than the ($0.13) loss that analysts are looking for. Its Q1 revenue forecast of $460 to $480 million is also well below analysts’ $498.95 million estimate.

For the full fiscal year 2018, ADSK sees EPS of ($0.73) to ($0.56), and revenues of $2.0 to $2.05 billion. Analysts are looking for sharply better results of ($0.14) on $2.18 billion in revenue.

The company commented via press release:

“Record new model subscription additions and continued cost control contributed to our strong fourth quarter results,” said Scott Herren, Autodesk chief financial officer. “We have invested in critical areas to fuel the transition and the long-term health of our business, while simultaneously reducing non-GAAP spend by three percent for the fiscal year. We’re starting fiscal 2018 from a position of strength, which gives us added confidence in our ability to achieve our long-term targets and drive long-term value creation for Autodesk shareholders.”