Earnings Preview: Citrix Systems

Citrix Systems (CTXS) is expected to report Q2 earnings after the market close on Wednesday, July 22, with a conference call scheduled for 4:45 pm ET.

Guidance

The consensus estimate is 38c for EPS and $386.87M for revenue, according to First Call.

Analyst Views

William Blair expects Citrix Systems to announce strong Q2 results, in-line with or above current expectations, and to maintain its FY09 guidance. The core business held up reasonably well in the quarter, with William Blair estimated XenApp license revenues of $88M. The firm's checks continue to indicate strong customer interest in desktop and client side virtualization, and it believes the company is well positioned to capitalize on this trend in the long term. However, despite its confidence that Citrix is likely to maintain full-year guidance, William Blair believes there is a small risk that management might provide Q3 guidance that is slightly below consensus because of continued softness in Europe. That said, the federal business has been strong over the past three quarters and as the September quarter is the government year-end, William Blair expects a federal budget flush to offset some of the weakness in Europe. Consequently, the firm did lower its Q3 estimate to $397M, slightly below the Street’s $398M.