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Citrix Systems Inc. (CTXS - Analyst Report) declared solid financial results for the fourth quarter of 2012. GAAP net income, for the reported quarter, was $114 million or 60 cents per share compared with $108.7 million or 58 cents per share in the prior-year quarter. Quarterly adjusted earnings per share of 73 cents were well above the Zacks Consensus Estimate of 67 cents. Fourth-quarter net revenue was $740 million, up 19.5% year over year, breezing past the Zacks Consensus Estimate of $707 million.

Furthermore, the company’s financial guidance for the ensuing first-quarter 2013 was robust. This was in sharp contrast to Citrix’s major competitor, VMware Inc. (VMW - Snapshot Report), which provided a tepid outlook for fiscal 2013, just a few days ago. Consequently, in the after market trade on NASDAQ, the stock price of Citrix rose $7.45 (11.12%) to $74.43. Citrix currently has a Zacks Rank #3 (Hold) whereas VMware carries a Zacks Rank #2 (Buy).

Gross margin in the fourth quarter of 2012 was 84.1% compared with 86.7% in the year-ago quarter. Operating expenses in the reported quarter were around $477.2 million compared with $401.5 million in the prior-year quarter. Quarterly operating margin was 19.7% compared with 21.9% in the prior-year quarter. At the end of the fourth quarter, deferred revenue was $1,200 million, up 25% year over year. In the reported quarter, Citrix repurchased 1.2 million of its common shares for a total consideration of about $76.72 million.

During the fourth quarter of 2012, Citrix generated over $226.7 million of cash from operations and free cash flow (cash flow from operations less capital expenditures) was approximately $191.1 million. At the end of fiscal 2012, the company had nearly $1,523.9 million of cash and marketable securities compared with $1,477.6 million at the end of 2011. Balance sheet remains free of any debt obligations.

Revenue by Product Mix

Product and Licenses revenue was $268.7 million, up 17.3% year over year. License updates and maintenance revenue was $303 million, up 22% year over year. Software-as-a-Service revenue was $135.4 million, up 18.4% over the prior-year quarter and Professional Services revenue was $32.9 million, up 19.7% year over year.

Revenue by Product Grouping

Mobile and Desktop revenue in the fourth quarter of 2012 was $410.7 million, up 11.3% year over year. Networking and Cloud Solutions revenue was $155.7 million, up by a significant 50.6% year over year. Online Services revenue was $135.4 million, up 18.4% year over year. Revenue from Other Products was $38.2 million, up 17.5% year over year.

Revenue by Geography

Revenue in the Americas (North & Latin America) region was $312.7 million. Revenue in Europe, Africa, and the Middle East region was $202.9 million. Revenue in the Asia-Pacific region was $89 million.

First Quarter of 2013 Financial Outlook

Management forecasted the company’s first-quarter 2013 revenue within the range of $670 million to $680 million. GAAP earnings per share will be within the range of 31 cents to 33 cents and non-GAAP earnings per share will be between 62 cents and 63 cents. Stock-based compensation expenses will be 23 cents per share.

Outlook for Fiscal 2013

Management expects the company’s fiscal 2013 revenue to grow 14% year over year and non-GAAP operating margin to expand 0.5% year over year.

Other Stocks to Consider

Other stocks to consider in the computer virtualization industry are Compuware Corp. and CA Inc. (CA - Analyst Report). While Compuware currently has a Zacks Rank #1 (Strong Buy), CA Inc. carries a Zacks Rank #2 (Buy).

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