Jefferies Raises PT on Autodesk (ADSK) 2.5% to $41; All Around Good Q3 as Margins, Billings Expand

Jefferies commented on Autodesk's (Nasdaq: ADSK) third-quarter 2012 results. The firm boosts its price target 2.5 percent from $40 to $41, while keeping a Buy rating on Autodesk.

After the market closed, Autodesk reported adjusted earnings of 44 cents per share and revenue of $548.6 million, beating views calling for earnings of 41 cents per share and revenue of $547.27 million. Jefferies was looking for EPS of 41 cents and revenue of $544 million. The firm notes, "the beat was driven by license strength ($331 million vs. us at $321 million), lower G&A ($39M million vs. us $42 million) and a lower than modeled share count."

Operating margins expanded 3.6 points to 24.6 percent, while billings increased 15 percent to $526 million.

Autodesk issued guidance calling for fourth-quarter revenue of $575 to $590 million and earnings of 42 to 45 cents per share, versus Jefferies outlook for revenue of $585 million and earnings of 46 cents per share. Jefferies also notes, "FY13 guidance calls for at least 10% revenue growth and approx 200bps of margin expansion. Our prior ests called for 9% rev growth and 110bps of margin expansion. We also believe this op margin guidance is ahead of the Street."

Some key points in the quarter:

1. Broad strength in MFG segment (PDM and simulation tools called out);
   
   
2. Cloud-based PLM offering to be unveiled in 2 weeks;
   
   
3. APAC growth (+19%cc) will continue to outpace Americas & EMEA;
   
   
4. AEC strength in EMEA and APAC;
   
   
5. record quarter in government vertical;
   
   
6. ADSK will phase out boxed shipments for licenses;
   
   
7. $90m cash used in the Q to buy 10 small companies;
   
   
8. 3.5M shares repurchased and end Q net cash of $6.65 a share.

Jefferies FY12 EPS moves from $1.70 to $1.71, and FY13 EPS from $1.95 to $2.05.

For an analyst ratings summary and ratings history on Autodesk click here. For more ratings news on Autodesk click here.

Shares of Autodesk closed at $34.04 yesterday.

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