Earnings Preview: BMC Software

BMC Software (BMC) is expected to report Q4 earnings after the market close on Tuesday, May 12 with a conference call scheduled for 5:00 pm ET.

Guidance

The consensus estimate is 62c for EPS and $487.02M for revenue, according to First Call. On Feb. 4 BMC provided EPS guidance for FY09 of $2.20-$2.30, ahead of the consensus then of $2.19. The company also maintained its expectations for total bookings growth in the mid-single digits, and total revenue growth in the high-single digits for FY09. It expects an adverse currency impact on bookings and revenue in Q4. It also expects the scope of the impact will be higher than it was in Q3.

Analyst Views

Oppenheimer said they would be buyers of BMC ahead of its Q4 release. Overall, Opco is expecting an in-line quarter and management to give an appropriately cautious outlook for FY10. Opco expects BMC to meet their Q4 revenue and EPS estimates of $492.1M/$0.63, which are marginally ahead of the Street. The top line should likely see some marginal benefit from forex relative to guidance as the dollar is 5%-8% weaker since February 4 when management guided for the quarter. Looking forward, the firm believes current FY10 EPS estimates are relatively conservative. Given Opco's confidence in management's ability to maintain expense discipline and the relatively healthy spending trends inside the data center, they believe both the estimates and multiple will move higher as FY10 progresses.

Separately, BMC has been named several times in the recent past as a possible acquisition candidate, pegged specifically to Cisco Systems (CSCO).