Earnings Preview: Citrix Sytems

Jan.26.11 | About: Citrix Systems, (CTXS)

Citrix Sytems (NASDAQ:CTXS) is expected to report Q4 earnings after the market close on Wednesday, January 26, with a conference call scheduled for 4:45 pm ET.


The consensus estimate is 60c for EPS and $508.8M for revenue, according to First Call. Guidance provided on its last earnings call was for 4 EPS of 59c-60c on $500M-$510M in revenue. The company had guided FY11 revenue to $2.04B-$2.07B. Citrix needs a strong beat and raise quarter to propel the shares meaningfully higher in the short term, after its shares retreated on F5’s (NASDAQ:FFIV) disappointing results. CLSA expects Citrix to beat its forecasts of $509.5M in revenues, the high end of guidance, representing year-over-year growth of 12.9%. The firm forecast non-GAAP earnings of 61c, also above the guided range. Because Citrix typically hedges currency, CLSA expects the impact from a stronger euro to be muted. The firm forecasts 10.5% license growth, up 10.1% quarter-over-quarter, and well below the 15.3% Q3/Q4 seasonal average from 2002-2009. XenDesktop will be in focus. CLSA expects solid bookings at $90M, up from $60M in Q3 and some investors are looking for at least $100M. CLSA is looking for upside to the quarter to come more broadly from XenApp, NetScaler and other products. Results from VMWare (NYSE:VMW), IBM (NYSE:IBM) and Intel (NASDAQ:INTC) point to strong enterprise IT spending trends. CLSA thinks Citrix remains well positioned as a beneficiary of both an enterprise spending rebound and secular trends in virtualization and cloud computing. CLSA maintains an Outperform rating and $78 price target.