Foolish Forecast: Autodesk for the People

Thursday night comes alive with a second-quarter earnings report from 3-D software specialist Autodesk (Nasdaq: ADSK  ) . Let's set the scene for you -- fully shaded, color-corrected, and tweaked for the final print.

What analysts say:

• Buy, sell, or waffle? Twenty-two analyst firms cover Autodesk, with 14 buy ratings and eight holds. In our Motley Fool CAPS community, it's a four-star stock with five-star aspirations, weighing input from more than 230 of your fellow investors.
• Revenue. Wall Street expects, on average, a $525 million quarter this time, 17% above last year's $450 million. That's right in the middle of the updated guidance of $520 million to $530 million.
• Earnings. For the average analyst, $0.43 per share would be enough, up from $0.37 per share last year. It's also the high end of management guidance, excluding $0.14 per share of one-time expenses and share-based compensation.

What management says:
CEO Carl Bass was ebullient in the latest conference call, telling us all about record revenue and new products. "In short, we are very confident about the future," he said. "We are raising our revenue guidance for the second quarter and the year to reflect that optimism."

What management does:
The core gross and operating metrics are very, very stable, and expanding cash flow points to a strong operational platform. I wouldn't worry too much about the net income line; in other words, as much of the impact there comes from non-cash accounting items that don't do much else than reduce the company's tax obligations. That's a good thing, if you were wondering.

Revenue growth should pick up again thanks to a full slate of product updates and new releases hitting the market in the first quarter. The full effect of that upgrade wave should be felt in this quarter as well as the next two or three.

Margins	1/06	4/06	7/06	10/06	1/07	4/07
Gross	88.9%	89.1%	88.9%	88.7%	88.5%	88.8%
Operating	24.6%	23.7%	23.6%	23.1%	24.2%	24.2%
Net	21.7%	18.9%	18.6%	15.7%	15.7%	17.0%
FCF/Revenue	25.7%	25.8%	27.4%	26.6%	29.4%	33.8%

Y-O-Y Growth	1/06	4/06	7/06	10/06	1/07	4/07
Revenue	24.1%	24.2%	20.7%	19.2%	19.7%	18.5%
Net Income	50.9%	18.7%	7.0%	-12.3%	-13.2%	6.6%

All data courtesy of Capital IQ, a division of Standard & Poor's. Data reflects trailing-12-month performance for the quarters ended in the named months.

One Fool says:
Autodesk tools power many of the stunning special effects you see in movies nowadays. Leading post-production and F/X houses like George Lucas' Industrial Light & Magic (oh, George, won't your baby ever go public?), Rhythm & Hues, and Sony (NYSE: SNE  ) Pictures ImageWorks use products like Maya, Flame, and Inferno to add pizzazz to box-office hits like Disney's (NYSE: DIS  ) Pirates of the Caribbean and Viacom's (NYSE: VIA  ) Transformers.

But that's just the sizzle. Autodesk's steak is in the design solutions segment, with industrial modeling software like AutoCAD and Buzzsaw helping engineers and product designers shape the stuff you see on store shelves every day. In the media segment, competition comes from the likes of Adobe (Nasdaq: ADBE  ) and Apple (Nasdaq: AAPL  ) ; Adobe remains a major force on the professional design side, along with Bentley Systems and Parametric Technology (Nasdaq: PMTC  ) .

Despite this onslaught of lovely and talented competitors, Autodesk remains a market leader and gains market-share wins in many of these segments, quarter after quarter. No wonder our CAPS players love this stock: Only one out of 70 All-Stars with a rating on Autodesk thinks it will underperform -- even that one is a special case, as you can tell by that player's name.

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Fool contributor Anders Bylund is a Disney shareholder but holds no other position in any of the companies discussed here. You can check out Anders' holdings if you like, and Foolish disclosure was painstakingly crafted from 6 million recycled 3-D polygons. We have an environmental responsibility here, see.