MICROS' 4Q Beats Estimates

MICROS Systems Inc.’s ( MCRS - Analyst Report ) non -GAAP diluted earnings per share for the fourth quarter of fiscal 2012 came in at 68 cents compared with 58 cents in the prior-year quarter and 56 cents in the previous quarter. This substantially surpassed the Zacks Consensus Estimate of 55 cents.

On a GAAP basis, earnings came in at 59 cents per share, versus 50 cents in the year-ago quarter and 53 cents in the prior quarter.

In fiscal 2012, non-GAAP diluted earnings per share were $2.22 compared with $1.92 in fiscal 2011. The results beat the Zacks Consensus Estimate of $2.00 per share.

Revenues

Revenues were $302.5 million, up 10.4% year over year and 8.8% sequentially. The record revenue was due to the company’s overall impressive performance in all its business segments across all regions.

On a segment basis, Service revenues came in at $196.3 million, rising 7.8% from $182.1 million in the previous year quarter. Hardware revenues came in at $69 million, increasing 21.1% from the year-ago quarter. Software revenues came in at $37.2 million, up 6.1% year over year.

In fiscal 2012, total revenue came to $1.1 billion, rising 9.9%, annually. Segment-wise, Service revenues amounted to $727 million, increasing 6.6% annually, Hardware revenues were $238 million, rising 19.6% year over year and Software revenues came in at $142.6 million, up 12.2% annually.

Income and Expenses

Gross margin came in at 54.7% compared with 56.5% in the year-ago quarter and 54.9% in the last quarter. Operating margin came in at 23.4% versus 23.7% in the previous year period and 20.1% in the previous quarter.

In the quarter, selling, general and administrative expenses came in at $71.6 million, increased 2.3% from the year-earlier quarter. Research and development expenses amounted to $14.2 million, up 16.9% annually.

In the fiscal year 2012, gross margin was 55.5% compared to 55.6% in the fiscal 2011, whereas operating margin came in at 21.2% in fiscal 2012 versus 20.9% in fiscal 2011.

Balance Sheet

MICROS ended the year with cash and cash equivalents and short-term investments of $582.0 million, down from $816.0 million at the end of the previous quarter. Net accounts receivable were $235.4 million at the end of the year compared with $208.3 million at the end of the prior quarter. As of June 30, 2012, inventory was $44.3 million versus $36.7 million at the end of the previous quarter.

Share Repurchase

In fiscal 2012, the company repurchased nearly 1.3 million shares out of which 110,000 shares were bought back in the fourth quarter of fiscal 2012.

Guidance

For fiscal 2013, the company expects that revenue will be within the range of $1.3 to $1.325 billion. MICROS projects that non-GAAP earnings per share will be within $2.40 to $2.44. The capital expenditure is also likely to be nearly $20 million in fiscal 2013.

Our Take

The company currently retains a Zacks #3 Rank, which translates into a short-term ‘Hold’ rating. We also maintain a long-term ‘Neutral’ recommendation on the stock.