Parametric Technology Earnings: Here’s Why Investors Like These Results

Parametric Technology Corporation (NASDAQ:PMTC) delivered a profit and beat Wall Street’s expectations, BUT came up short on beating the revenue expectation. The revenue miss is a negative sign to shareholders seeking high growth out of the company.

Parametric Technology Corporation Earnings Cheat Sheet

Results: Adjusted Earnings Per Share increased 21.62% to $0.45 in the quarter versus EPS of $0.37 in the year-earlier quarter.

Revenue: Rose 1.61% to $316 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Parametric Technology Corporation reported adjusted EPS income of $0.45 per share. By that measure, the company beat the mean analyst estimate of $0.43. It missed the average revenue estimate of $322.32 million.

Quoting Management: James Heppelmann, president and chief executive officer, commented, “PTC delivered solid operating results, with non-GAAP EPS at the high end of our guidance range, despite Q3 non-GAAP revenue at the low end of our guidance range in a continuing difficult macroeconomic environment. Our license revenue of $80 million was down 5% year over year (down 1% on a constant currency basis). Servigistics had another solid quarter and performed in line with our expectations. From a geographic perspective, we had a strong quarter in the Americas and Japan, which was positively impacted by a large transaction, partially offset by unfavorable Fx movements, and soft results in Europe and the Pac Rim reflecting the challenging macro environment in Europe and China.”

Heppelmann added, “While we are tempering our near-term revenue outlook, we saw a strengthening in our pipeline, which we view as a positive sign for the longer-term as this pipeline matures over the coming quarters. We remain encouraged by the interest in our SLM solutions in the market, however, the macro environment continues to weigh on our overall business. Additionally, large deals continue to be difficult to close in this environment. We had 33 large deals (recognized license + services revenue of more than $1 million) in Q3’13. Consistent with recent quarters, the mix of large deal revenue was skewed more heavily toward Services reflecting a lower level of large license transactions. During the quarter we recognized revenue from leading organizations such as Dell, Elliott Group, Embraer, Fujitsu Ten Limited, Raytheon, Renault, Steelcase, Taiwan Greenpoint, Unisys, the United States Navy, and Vita-Mix.”

Key Stats (on next page)…

Revenue increased 0.65% from $313.95 million in the previous quarter. EPS increased 9.76% from $0.41 in the previous quarter.

Looking Forward: Analysts have a neutral outlook for the company’s next-quarter performance. Over the past three months, the average estimate for next quarter’s earnings is a profit of $0.56 and has not changed. For the current year, the average estimate has moved down from a profit of $1.76 to a profit of $1.75 over the last ninety days.

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(Company fundamentals provided by Xignite Financials. Email any earnings discrepancies to earnings [at] wallstcheatsheet.com)