Earnings Preview: BMC Software

BMC Software (BMC) is expected to report Q1 earnings after market close Thursday, July 24, with a conference call scheduled for 5:00 p.m. ET.

Guidance

The consensus estimate is 43c for EPS and $432.55M for revenue, according to First Call. Last quarter, 4Q'08, the company reported higher than expected EPS and revenue, and provided higher than expected EPS guidance of $2.10 to $2.20 for 2009. The company's operating margins had jumped to 790 basis points year-over-year, to 29.4%.

Analyst Views

Oppenheimer said that they viewed IBM's (IBM) strong mainframe performance in 2Q and management's positive commentary on its 2H08 mainframe backlog as positive signs for mainframe management vendors such as BMC. Goldman said the mainframe business should benefit from IBM's strong z-10 cycle, but they see the large deal environment for distributed systems management as a risk.