Earnings Preview: Citrix Systems

Jul.25.12 | About: Citrix Systems, (CTXS)

Citrix Systems (NASDAQ:CTXS) is expected to report Q2 earnings after the market close on Wednesday, July 25, with a conference call scheduled for 4:45 pm ET.

Guidance

The consensus estimate is 59c for EPS and $613.24M for revenue, according to First Call. The company has reported double-digit revenue increases for the past four quarters. The biggest boost came in the most recent quarter when revenue increased 20.1% year-over-year. Analysts contend that recent global trends toward virtualization and cloud computing will facilitate Citrix to report solid results. In late April, Citrix provided a Q2 non-GAAP EPS/revenue outlook of 58c-59c/$605M-$615M. In addition, the company expected FY12 non-GAAP EPS/revenue of $2.75-$2.79/$2.53B-$2.56B.

Analyst Views

ThinkEquity expects Citrix to show strength in its cloud networking NetScaler business, driven by the company's dominance in the Internet/ hosting vertical, which, according to its checks, continues its strong expansion. The firm expects Citrix to also show incremental improvement in VDI license revenue and to continue to grow the SaaS business ahead of overall revenue growth. ThinkEquity expects the Desktop business -- with the exception of VDI -- to show some of the strain of European and financial services exposure. ThinkEquity believes the closure of the Bytemobile acquisition, which was not included in Citrix's FY12 outlook provided in late April 2012, will likely act as buffer to Citrix's updated Q3 and FY12 outlook. The firm believes Citrix will reiterate its FY12 revenue outlook as Bytemobile's incremental revenue of approximately $40M will potentially offset the negative impact of a slowing global macroeconomic environment on virtual desktop adoption.