Software design maker, Autodesk Inc. (ADSK) reported fourth quarter 2011 earnings of 27 cents per share, which was in line with the Zacks Consensus Estimate. Earnings per share (EPS), including stock-based compensation but excluding one-time charges, increased 22.7% year over year, primarily driven by strong revenue growth. Net Income of $64.3 million increased 27.3% year over year.

Revenue

Revenues increased 16.0% year over year to $528.0 million in the fourth quarter. This was above the Zacks Consensus Estimate of $515.0 million and management’s guided range of $500.0 million to $520.0 million. The company witnessed a rebound in demand for its software solutions in fiscal 2011.

The year-over-year growth was driven by higher license and other revenues, which increased 22.1% year over year to $329.6 million. Maintenance revenues rose 6.4% year over year to $198.1 million in the quarter.

Autodesk experienced a year-over-year growth in all of its geographical regions. Revenues in America jumped 15.0% year over year to $193.0 million.

International businesses posted a strong revenue growth in the quarter. EMEA revenues were up 13.0% year over year and 22.0% on a constant currency basis to $212.0 million. Asia-Pacific revenues escalated 22.0% year over year and 20.0% on a constant currency basis to $123.0 million.

Revenues from emerging economies represented 16.0% of total revenue in the quarter and climbed 16.0% year over year and 20.0% on a constant currency basis to $85.0 million.

On a segmental basis, Platform Solutions and Emerging Business revenues grew 10.0% year over year to $181.0 million in the fourth quarter. Revenues from the Architecture, Engineering and Construction (AEC) business segment were $162.0 million, an increase of 18.0% year over year, whereas Manufacturing revenues were $133.0 million, up 23.0% year over year in the quarter. Revenues from the Media and Entertainment business rose 12.0% year over year to $52.0 million in the quarter.

Operational Performance

Gross profit of $488.2 million was up 16.21% year over year. Gross margin decreased 100 basis points year over year to 92.0%, primarily due to higher revenues.

Operating expenses increased 15.4% year over year to $382.1 million, primarily attributed to higher marketing & sales expenses and research & development expenses.

Operating income of $106.1 million was up 19.2 % year over year. Operating margin was 20.0%, an increase of 60 basis points from the year-ago quarter. This was primarily driven by strong revenue growth in the quarter.

Balance Sheet and Cash Flow

Autodesk’s balance sheet remains strong with no debt. Exiting fourth quarter 2011, total cash and investments were $1.47 billion compared with $1.14 billion in the previous quarter. Cash flow from operating activities was $176.0 million, up 54.0% from $114.0 million in the previous quarter.

Guidance

For the first quarter of 2012, Autodesk expects revenues in the range of $510.0 million to $525.0 million. GAAP EPS are expected to be in the range of 21 cents to 24 cents. Non-GAAP EPS are expected in the range of 34 cents to 37 cents for the quarter. The Zacks Consensus Estimate is currently pegged at 29 cents per share for first quarter of 2012 at the time the company reported results.

For fiscal 2012, Autodesk expects revenues to increase 10.0% year over year. Non-GAAP operating margin is expected to increase 200 basis points on a year-over-year basis. The company did not provide any EPS guidance for the full year. The current Zacks Consensus Estimate is pegged at $1.36 per share for fiscal 2012.

The outlook includes the impact of two recently announced acquisitions, which are expected to close in the first quarter. Autodesk faces tough competition from Adobe Systems Inc. (ADBE) and Apple Inc. (AAPL).

Analyst Estimate revision has been mixed in the run up to the earnings release. In the last 30 days, 3 of 7 analysts made an upward revision to their 2011 estimates while 2 analysts lowered the estimate for full-year 2011. Currently, Autodesk has a Zacks #3 Rank, which translates into a short-term Hold rating on the stock (1-3 months).

 
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