Earnings Preview: Citrix Systems

Jul.27.11 | About: Citrix Systems, (CTXS)

Citrix Systems (NASDAQ:CTXS) is expected to report Q2 earnings after the market close on Wednesday, July 27, with a conference call scheduled for 4:45 pm ET.


The consensus estimate is 55c for EPS and $522.86M for revenue, according to First Call. Back on April 27, the stock rose 5% after an earnings beat and guidance. Management provided guidance for Q2/FY11: EPS of 54c-55c/$2.38-$2.41 on revenue of $515M-$525/$2.14B-$2.17B.

Analyst Views

CLSA believes Citrix is well positioned to exceed Q2 expectations on strength in desktop and SaaS offerings. The firm sees Citrix benefiting from a healthy XenDesktop migration cycle, solid enterprise spending and secular interest in endpoint virtualization. CLSA believes Citrix is likely to beat its forecasts and will sustain a bullish full-year outlook. For Q2, CLSA estimates $528.2M and 56c, slightly ahead of consensus. CLSA forecasts Q2 bookings of $596.2M or 17.3% YoY growth, 19.1% QoQ. Strong enterprise results from IBM, VMWare (NYSE:VMW) and Microsoft (NASDAQ:MSFT) support positive virtualization trends that CLSA believes should offset concerns over Europe, the Middle East and Africa, or EMEA, weakness that contributed to Q2 disappointments at F5 Networks (NASDAQ:FFIV) and Riverbed (NASDAQ:RVBD).

Looking forward: For Q3, CLSA estimates revenues of $537.9M and non-GAAP EPS of 60c, slightly below consensus of $542.80M and 61c. CLSA reiterates an Outperform rating and $92 target price. Citrix is currently trading at the high-end of its 52-week price range. The stock price has moved a whopping 94% in the past one year.