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Citrix Systems (CTXS) Q3 Earnings Top Estimates, Decline Y/Y

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Citrix Systems Inc. posted better-than-expected earnings but lower-than-expected revenues in the third quarter of 2017.

The cloud computing company’s earnings (excluding 40 cents from non-recurring items) came in at $1.22 per share, above the Zacks Consensus Estimate of $1.04. The bottom line, however, declined 7.6% from the year-ago figure.

Net revenue came in at $690.9 million, marginally below the Zacks Consensus Estimate of $691.2 million. Revenues also slumped 17.9% on a year-over-year basis. 

The year-over-year decline in earnings and revenues seemed to have displeased investors. Consequently, the stock was down 1.7%in aftermarket trading on Oct 25.

Operating Results

Gross margin (adjusted) was 87% in the quarter under review compared with 86% in the prior-year quarter. Quarterly operating margin (adjusted) was 32% compared with 30% in the prior-year quarter. As of Sep 30, 2017, deferred revenues grossed $1.7 billion compared with $1.5 billion a year ago. Total operating expenses inched up 1.4% to $448.27 million in the reported quarter.

During the third quarter of 2017, Citrix generated approximately $255 million of cash from operations compared with $238 million in the same quarter of 2016. Citrix exited the quarter with $940.87 million in cash and cash equivalents compared with $836.0 million at the end of 2016.

Revenues by Product Mix

Product and Licenses revenues grossed $192.10 million, down 6.8% year over year. License updates and maintenance revenues totaled $420.95 million, up 5.7% year over year. Software-as-a-Service (SaaS) revenues came in at $45.81 million, up 32.1% from the prior-year quarter. Professional Services revenues increased 7.4% to $32.06 million in the reported quarter.

Revenues by Geography

Net revenues in the Americas (both North & Latin America) increased 2% on a year-over-year basis, while it grew 7% in the Europe, Middle East and Africa (EMEA) region. However, revenues in the Asia-Pacific (APJ) region slid by 1%.

 

Citrix Systems, Inc. Price, Consensus and EPS Surprise

 

Citrix Systems, Inc. Price, Consensus and EPS Surprise | Citrix Systems, Inc. Quote

 

Outlook for 2017

The Fort Lauderdale, FL-based company expects net revenue in the range of $2.82-$2.83 billion (previous guidance: $2.81-$2.83 billion). The Zacks Consensus Estimate for the same is $2.82 billion. Earnings per share (on an adjusted basis) are projected in the $4.79-$4.81 band (previous guidance: $4.60-$4.65), ahead of the Zacks Consensus Estimate of $4.62.

Outlook for 2018

The company expects net revenues to increase approximately 1-2% in 2018. Additionally, it expects operating margin (adjusted) in the 29-30% band for full-year 2018.

Upcoming Releases

Investors interested in the broader Computer and Technology sector are keenly awaiting earnings numbers from key players, namely, Harris Corporation , ARRIS International PLC and Motorola Solutions, Inc. (MSI - Free Report) . Harris is scheduled to report first-quarter fiscal 2018 results on Oct 31, while ARRIS and Motorola will reveal third-quarter results on Nov 1 and Nov 2, respectively.

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