Beams of Cash Flow From BMC

While Cisco warned of slowing tech spending for North America, BMC (NYSE: BMC  ) has been taking the opposite view. In fact, it isn't even seeing weakness in the financial sector -- perhaps because it recently landed a major contract with Merrill Lynch (NYSE: MER  ) .

For the third quarter, BMC's revenue came to $421 million, up 9% from the previous year. Bookings increased 8% to $341 million, indicating that customers continue to load up on BMC's software. The company generated strong operating cash flows, too, tripling in Q3 to $319 million. To top it all off, the company has about $1.5 billion in the bank.

More importantly, BMC thinks the momentum it's currently enjoying will continue. The company boosted its full-year earnings guidance to $1.78 to $1.86 per share, with revenue growth topping 6%. 

Over the past few years, BMC has invested aggressively in broadening its product line, known as BSM (business service management) software. It helps companies manage a complex information technology (IT) environment by minimizing downtime, tracking assets, and improving security. These are must-have applications for major companies, and so far, BMC is competing effectively against rivals like IBM (NYSE: IBM  ) , CA (NYSE: CA  ) , and Hewlett-Packard (NYSE: HPQ  ) .

To further bolster its position, BMC continues to buy up companies. In Q3, it purchased Emprisa, which helps with large change-updates across networks, and RealOps, which helps automate some labor-intensive IT approaches.

However, the market might disagree with BMC's view on tech spending. The uncertainty regarding the U.S. economy could mute enthusiasm for large software players -- even those that are showing lots of strength. It may take until next year, as things get clearer, for investors to start warming up to companies like BMC.

Further Foolishness:


Read/Post Comments (0) | Recommend This Article (1)

Comments from our Foolish Readers

Help us keep this a respectfully Foolish area! This is a place for our readers to discuss, debate, and learn more about the Foolish investing topic you read about above. Help us keep it clean and safe. If you believe a comment is abusive or otherwise violates our Fool's Rules, please report it via the Report this Comment Report this Comment icon found on every comment.

Be the first one to comment on this article.

Sponsored Links

Leaked: Apple's Next Smart Device
(Warning, it may shock you)
The secret is out... experts are predicting 458 million of these types of devices will be sold per year. 1 hyper-growth company stands to rake in maximum profit - and it's NOT Apple. Show me Apple's new smart gizmo!

DocumentId: 539978, ~/Articles/ArticleHandler.aspx, 12/21/2014 3:26:04 PM

Report This Comment

Use this area to report a comment that you believe is in violation of the community guidelines. Our team will review the entry and take any appropriate action.

Sending report...


Advertisement