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Citrix Systems (CTXS) Q2 Earnings: What's In the Offing?
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Citrix Systems Inc. is scheduled to report second-quarter 2018 results on Jul 25.
This Fort Lauderdale, FL-based software provider has a positive record of earnings surprises in the trailing four quarters, recording an average beat of 11.99%.
In first-quarter 2018, Citrix delivered first-quarter 2018 adjusted earnings of $1.29 per share, outpacing the Zacks Consensus Estimate by 24 cents. The figure surged 33% on a year-over-year basis.
Moreover, revenues increased 5.2% from the year-ago quarter to $697.2 million and comfortably surpassed the Zacks Consensus Estimate of $676 million. However, revenues were hurt by $10 million negative impact from the adoption of ASC 606.
What to Expect?
For second-quarter 2018, Citrix anticipates non-GAAP earnings between $1.18 and $1.22 per share. We note that the Zacks Consensus Estimate has remained unchanged over the past 30 days. In fact, the Zacks Consensus Estimate for earnings is pegged $1.20 per share, representing growth of 16.5% year over year.
The company expects revenues in the range of $710-$720 million. The analysts polled by Zacks project revenues of roughly $717 million, near higher-end of management’s guidance, up approximately 3.4% from the year-ago quarter.
Let's discuss the factors likely to influence second-quarter results.
Factors at Play
Citrix’s efforts to expand product portfolio are impressive. The company’s Cedexis acquisition, which it completed in the previous quarter, has added traffic management capabilities. The buyout is expected to boost Citrix’s ability to support enterprise customers as far as their adoption of cloud IT infrastructure is concerned.
The company also introduced innovations to its Citrix Workspace to support its clientele better with digital transformation at Citrix Synergy conference.
The company also announced a wider choice of devices for its Citrix Endpoint Management solution. At the conference, the company announced its tie-up with Microsoft (MSFT - Free Report) to offer Citrix value-add capabilities to be deployed on Azure’s Remote Desktop Management Infrastructure (“RDMi”) platform. Further, the company’s XenApp will enable Windows Server 2019 to aid it offer virtualized apps.
Notably, the company’s Cloud services were selected by WAGO. This new customer addition is likely to generate incremental revenues for the second quarter.
We believe the company’s buyouts, strategic alliances and addition of innovative features to its offerings are likely to act as tailwinds for second-quarter results.
Further, the company's efforts to reward shareholders through share buybacks are impressive.
Underlying Risks
High costs have hurt the bottom line for quite some time. Moreover, Citrix results are susceptible to foreign exchange movements as it continues to foray into non-U.S. markets. Increasing long-term debt also remains a concern.
Our proven model shows that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Sell-rated stocks (4 or 5) are best avoided, especially when the company is seeing negative estimate revisions.
Citrix has a Zacks Rank #3 and an Earnings ESP of -0.57%, which makes surprise prediction difficult.
Stocks with Favorable Combination
Here are a couple of stocks from the broader technology sector, you may want to consider as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.
ServiceNow (NOW - Free Report) has an Earnings ESP of +8.13% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
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Citrix Systems (CTXS) Q2 Earnings: What's In the Offing?
Citrix Systems Inc. is scheduled to report second-quarter 2018 results on Jul 25.
This Fort Lauderdale, FL-based software provider has a positive record of earnings surprises in the trailing four quarters, recording an average beat of 11.99%.
In first-quarter 2018, Citrix delivered first-quarter 2018 adjusted earnings of $1.29 per share, outpacing the Zacks Consensus Estimate by 24 cents. The figure surged 33% on a year-over-year basis.
Moreover, revenues increased 5.2% from the year-ago quarter to $697.2 million and comfortably surpassed the Zacks Consensus Estimate of $676 million. However, revenues were hurt by $10 million negative impact from the adoption of ASC 606.
What to Expect?
For second-quarter 2018, Citrix anticipates non-GAAP earnings between $1.18 and $1.22 per share. We note that the Zacks Consensus Estimate has remained unchanged over the past 30 days. In fact, the Zacks Consensus Estimate for earnings is pegged $1.20 per share, representing growth of 16.5% year over year.
The company expects revenues in the range of $710-$720 million. The analysts polled by Zacks project revenues of roughly $717 million, near higher-end of management’s guidance, up approximately 3.4% from the year-ago quarter.
Let's discuss the factors likely to influence second-quarter results.
Factors at Play
Citrix’s efforts to expand product portfolio are impressive. The company’s Cedexis acquisition, which it completed in the previous quarter, has added traffic management capabilities. The buyout is expected to boost Citrix’s ability to support enterprise customers as far as their adoption of cloud IT infrastructure is concerned.
The company also introduced innovations to its Citrix Workspace to support its clientele better with digital transformation at Citrix Synergy conference.
The company also announced a wider choice of devices for its Citrix Endpoint Management solution. At the conference, the company announced its tie-up with Microsoft (MSFT - Free Report) to offer Citrix value-add capabilities to be deployed on Azure’s Remote Desktop Management Infrastructure (“RDMi”) platform. Further, the company’s XenApp will enable Windows Server 2019 to aid it offer virtualized apps.
Notably, the company’s Cloud services were selected by WAGO. This new customer addition is likely to generate incremental revenues for the second quarter.
We believe the company’s buyouts, strategic alliances and addition of innovative features to its offerings are likely to act as tailwinds for second-quarter results.
Further, the company's efforts to reward shareholders through share buybacks are impressive.
Underlying Risks
High costs have hurt the bottom line for quite some time. Moreover, Citrix results are susceptible to foreign exchange movements as it continues to foray into non-U.S. markets. Increasing long-term debt also remains a concern.
Citrix Systems, Inc. Price and EPS Surprise
Citrix Systems, Inc. Price and EPS Surprise | Citrix Systems, Inc. Quote
What Does the Zacks Model Unveil?
Our proven model shows that a stock needs to have both a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) for this to happen. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.
The Sell-rated stocks (4 or 5) are best avoided, especially when the company is seeing negative estimate revisions.
Citrix has a Zacks Rank #3 and an Earnings ESP of -0.57%, which makes surprise prediction difficult.
Stocks with Favorable Combination
Here are a couple of stocks from the broader technology sector, you may want to consider as our proven model shows that these have the right combination of elements to post an earnings beat this quarter.
Advanced Micro Devices (AMD - Free Report) has an Earnings ESP of +2.45% and a Zacks Rank #2.You can see the complete list of today’s Zacks #1 Rank stocks here.
ServiceNow (NOW - Free Report) has an Earnings ESP of +8.13% and a Zacks Rank #3.
Looking for Stocks with Skyrocketing Upside?
Zacks has just released a Special Report on the booming investment opportunities of legal marijuana.
Ignited by new referendums and legislation, this industry is expected to blast from an already robust $6.7 billion to $20.2 billion in 2021. Early investors stand to make a killing, but you have to be ready to act and know just where to look.
See the pot trades we're targeting>>