MICROS Systems, Inc. (MCRS) reported revenues of $225.6 million in the second quarter of fiscal 2010, down 4.6% from a year ago but almost flat sequentially.
On a segment basis, hardware revenues came in at $45.8 million, down 17.7% year over year. Software revenues came in at $30.5 million, down 19.084% year over year. Service revenues came in at $149.4 million, up 4.3% year over year.
Most customers are either in the hospitality or specialty retail industry. Consumer spending is not expected to improve significantly unless job creation accelerates.
Gross margin for the quarter came 55.4%, up from 51.6% in the prior quarter. Operating expenses came in at 35.9% compared to 35.3% in the year-ago quarter. Operating income came in at 19.5% compared to 17.9% in the year-ago quarter.
Net income came in at $29.0 million or 36 cents per share compared to a net income of $27.3 million or 34 cents in the previous quarter. This easily beat the Zacks Consensus Estimate of 32 cents.
As of December 31, 2009, MICROS had cash and investments of $531.5 million, an increase of $6 million from the September 30 quarter. During the quarter, MICROS purchased 160,000 shares for $4.6 million. The company still has $2 million left in its repurchase program.
At the end of the quarter, inventory was $37 million, a decrease of $2 million from the last quarter. The decrease is due to the corporate inventory reduction programs. Deferred revenue was $118.4 million, down by $23.4 million from the end of the September quarter.
Management reiterated its guidance for 2010 and expects business conditions to improve. Revenue is projected at $910 million. Earnings per share are projected between $1.39 and $1.40.
Last month, management stated that it would acquire TIG Global, one of the leading interactive marketing companies. Headquartered in Washington, DC, TIG Global serves the online needs of a diverse portfolio of clients located around the world.
Management expects that this acquisition will allow the company to offer complete end-to-end solutions to hotel customers for distribution placement, marketing of hotel rooms, and alternative distribution platforms. Management stated that TIG Global’s leading technology and focus on the hospitality and travel industry makes TIG an ideal partner for MICROS.
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