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Autodesk Inc. (ADSK - Analyst Report) is scheduled to release its fiscal second quarter 2013 results after the market closes on August 23, 2012.  In the run up to the earnings release we do not notice any movement in the analysts’ estimates. However, Autodesk has a negative average earnings surprise of 0.4% over the trailing four quarters.

Previous Quarter Highlights

Autodesk reported mixed first quarter results. The bottom line of 36 cents (including stock based compensation) missed the Zacks Consensus Estimate by 3 cents. However, the reported earnings increased 12.5% from the previous-year quarter on the back of revenue growth across all geographies and business segments.

The top line increased 11.4% year over year to $588.6 million in the reported quarter and was slightly ahead of the Zacks Consensus Estimate of $587.0 million. The year-over-year growth was driven by improved performances from Manufacturing, and Architecture, Engineering and Construction (AEC) business segments and strong revenue from Suites.

For second quarter 2013, Autodesk expects revenues in the range of $580.0 million to $600.0 million. The Zacks Consensus Estimate is pegged at $592.0 million. Management expects non-GAAP EPS in the range of 46 cents to 51 cents.

For further details please read: Autodesk Reports Mixed 1Q

Earnings Estimates Trend

Over the past 30 days, none of the five analysts covering the stock revised their estimates in either direction. Thus, the Zacks Consensus Estimate for the second quarter remained at 40 cents.

Analysts covering the stock expect revenue to be positively impacted by the price rise and increasing mix of recurring subscription revenue. The migration of AutoCAD customers from 2D to 3D will be incrementally beneficial for the company to drive revenues. Moreover, the company’s foray into the emerging economies is expected to be the positive catalyst for Autodesk. However, the sluggish macroeconomic environment remains the primary headwind for the company in the near-term.

Recommendation

In our view, the company’s innovations in 3D design technology provide a competitive edge. Moreover, Autodesk’s expanding product portfolio and broadening industry and geographic reach will help it sustain its longer-term growth strategy of providing high-volume, lower-cost CAD software. We believe that this will likely drive earnings going forward.

Moreover, the company’s expanding cloud computing services portfolio will expand its customer base going forward. The company is also increasing its penetration in the mobile market by developing software for smartphones and Apple Inc.’s (AAPL - Analyst Report) iPad. We believe that these initiatives will boost Autodesk’s top-line growth going forward.

However, Autodesk’s high exposure to Europe (approximately 40% of revenues) amidst the lingering financial turmoil in the region keeps us cautious on the stock. Moreover, customer concentration and increasing competition are the other headwinds.

We have a Neutral recommendation on Autodesk’s shares in the long term. Currently, Autodesk has a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating.

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