Anyone who works with computer-aided design (CAD) is familiar with Autodesk (Nasdaq: ADSK ) , maker of the world's most popular CAD software. AutoCAD provides 44% of this company's revenues, and this quarter, that was enough to push earnings and sales past earlier guidance and analyst expectations.
Net GAAP income for the quarter was $49 million, or $0.20 per diluted share. Backing out stock-based compensation and other items leaves $0.32 per share of non-GAAP earnings; analysts wanted to see at least $0.31. It's all derived from $436 million of sales (up 22.8% over the year-ago quarter), with 80% of that coming from software licenses and the rest from support and consulting services.
Autodesk continues to stave off competitors such as Parametric Technology (Nasdaq: PMTC ) and Intergraph (Nasdaq: INGR ) to maintain its chokehold on the mechanical, engineering, and industrial CAD markets. Customers' respect for AutoCAD's quality has given AutoDesk enough pricing power to grow gross margins every year for the last five years. (According to Capital IQ, those margins currently stand at 88%.)
This market power extends worldwide. Autodesk generated $170 million of revenues in the Americas this quarter, $164 million in Europe, and $101 million in the Asian/Pacific area. I think I've mentioned the power of geographic diversity before, and Autodesk is another great example of a company with a good cushion against local, regional, and even continental downturns.
The stock has been waffling up and down this year, and the latest report doesn't appear to change that. Even though all targets were met and forward guidance was upped, the stock price took a slight dive the day after earnings were released. Then again, Autodesk's stock has been on a tear since mid-2002. Despite the recent stagnation, today's price is more than five times what it was four summers ago.
Computer modeling and design clearly aren't going away. As long as Autodesk maintains its mindshare in the designer community, I'd say we're looking at an interesting stock idea for the long term here. Sometimes, a pullback may indicate a buying opportunity.
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Fool contributorAnders Bylundcan't design his way out of a paper bag, and he does not own any of the companies mentioned -- or their products. Foolishdisclosureis always state-of-the-art.
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