BMC Software Third Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component BMC Software (NASDAQ:BMC) will unveil its latest earnings tomorrow, Monday, January 28, 2013. BMC Software is a software vendor offering an extensive portfolio of software solutions, including mainframe, distributed and virtualized systems, applications, databases, and IT process management functions.

BMC Software Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for net income of 85 cents per share, a rise of 23.2% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from 84 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 85 cents during the last month. For the year, analysts are projecting profit of $2.86 per share, a rise of 4% from last year.

Last quarter, the company came in at net income of 71 cents per share against a mean estimate of profit of 70 cents per share, beating estimates after missing them in the previous quarter. In the first quarter, it missed forecasts by 13 cents.

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A Look Back: In the second quarter, profit fell 14.7% to $97.8 million (61 cents a share) from $114.7 million (65 cents a share) the year earlier, but exceeded analyst expectations. Revenue fell 1.5% to $548.2 million from $556.7 million.

Here’s how BMC Software traded following its last earnings report 3 months ago and leading up to its upcoming earnings report this week:

bmc

Stock Price Performance: Between November 21, 2012 and January 22, 2013, the stock price had risen $3.68 (9.3%), from $39.68 to $43.36. The stock price saw one of its best stretches over the last year between August 1, 2012 and August 10, 2012, when shares rose for eight straight days, increasing 10% (+$3.74) over that span. It saw one of its worst periods between June 29, 2012 and July 12, 2012 when shares fell for nine straight days, dropping 8.5% (-$3.61) over that span.

Wall St. Revenue Expectations: On average, analysts predict $587.4 million in revenue this quarter, a rise of 7.1% from the year-ago quarter. Analysts are forecasting total revenue of $2.25 billion for the year, a rise of 3.7% from last year’s revenue of $2.17 billion.

Key Stats:

On the top line, the company is looking to get back on the right track after last quarter’s drop snapped a string of revenue increases. Revenue rose 1.5% in the third quarter of the last fiscal year, 0.4% in the fourth quarter of the last fiscal year and 0.4%in the first quarter before dropping in the second quarter.

The company is trying to use this earnings announcement to rebound from profit declines in the last three quarters. Net income fell 42.3% in the fourth quarter of the last fiscal year, by 43.5% in the first quarter and again in the second quarter.

Analyst Ratings: With seven analysts rating the stock a buy, none rating it a sell and four rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.46 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)