The 10-second takeaway
For the quarter ended Dec. 31 (Q3), BMC Software met expectations on revenues and missed estimates on earnings per share.
Compared to the prior-year quarter, revenue grew and GAAP earnings per share dropped.
Margins dropped across the board.
BMC Software reported revenue of $580.2 million. The 13 analysts polled by S&P Capital IQ predicted sales of $587.4 million on the same basis. GAAP reported sales were 5.8% higher than the prior-year quarter's $548.2 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.99. The 15 earnings estimates compiled by S&P Capital IQ predicted $1.01 per share. GAAP EPS of $0.70 for Q3 were 1.4% lower than the prior-year quarter's $0.71 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 74.4%, 50 basis points worse than the prior-year quarter. Operating margin was 25.4%, 410 basis points worse than the prior-year quarter. Net margin was 18.3%, 360 basis points worse than the prior-year quarter.
Next quarter's average estimate for revenue is $609.9 million. On the bottom line, the average EPS estimate is $1.04.
Next year's average estimate for revenue is $2.25 billion. The average EPS estimate is $3.56.
The stock has a five-star rating (out of five) at Motley Fool CAPS, with 323 members out of 344 rating the stock outperform, and 21 members rating it underperform. Among 131 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 127 give BMC Software a green thumbs-up, and four give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on BMC Software is outperform, with an average price target of $43.92.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of BMC Software. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.