Autodesk Engineers a Solid Quarter

Posted Feb 24th 2010 12:10PM by Tom Taulli
Filed under: Major Movement, Earnings Reports

Autodesk (ADSK), which is the developer of AutoCAD and other sophisticated design tools, is showing signs of a comeback. In the company's latest quarterly report, profits came to $50.1 million, or $0.21 per share, up from a loss of $105.3 million, or $0.47 per share in the same period a year ago. Although, there was a decline in revenues of 6.9% to $456.1 million and license revenues fell 13%.

Keep in mind that Autodesk has been aggressive in cutting costs. For the past year, the company realized savings of $312 million million. The original goal was $250 million.

And there may be even more cost savings. Autodesk expects that operating margins will increase significantly over the next couple years.

At the same time, there should also be a pick-up in revenues as budgets are starting to loosen up and there will also be a need to replace existing software. Another bright-spot is emerging markets, where Autodesk has made some key investments.

It helps that Autodesk continues to innovate such as building the key technologies for the record-breaking movie, Avatar. In other words, Autodesk may benefit -- over the long-term -- from the transition to 3D movies.

So far in today's trading, the shares of the company are up 10% to $28.25.

Tom Taulli advises on business tax preparation and is also the author of a variety of books, including The Complete M&A Handbook. His website is at Taulli.com.

Tags: adsk, Autodesk, featured