Tuesday, November 17, 2009

Autodesk down after hours (ADSK)

Autodesk (ADSK), king of Computer-Aided-Design (CAD) software, is down 4% in after hours trading.

The company, based in San Rafael, California, had a pretty good quarter. But guidance for the upcoming quarter is "messy" as some in the industry like to say.

The company affirmed that they expect revenue in the $420-440million range, in line with Wall Street consensus of $432million. But ADSK is guiding earnings per share (excluding non-cash expenses) to a range of 19-24 cents, below the expected 25cents. The lower earnings on "in-line" revenue could be a result of higher spending, but might also be due to the continued slipping in pricing, evidenced by gross margin falling 2% from last year in the most recent quarter.

“While there are several data points in our business that are encouraging and represent positive indicators for our business, the health of the global economic environment remains mixed and the continued job losses in our core markets represent ongoing challenges to a swift recovery in our business."

With shares up over 100% from March lows, it's no wonder the stock is selling off after lowered guidance. Like other companies, ADSK has to "grow into" the stock gains that have been afforded it as of late. Earnings guidance below Wall Street expectations does not fit that bill.

Copyright 2009 AlphaNinja

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