BMC Software has significantly exceeded market forecasts in reporting its financial results for its third quarter of fiscal 2003, ended 31 December 2002.
BMC Software`s net earnings excluding special items for the third quarter were $34.6 million, and diluted earnings per share on this basis were $0.15, an increase of $0.07 compared to the third quarter of fiscal 2002. This exceeds the $0.07 to $0.10 range the company provided in November and is $0.06 higher than the analyst consensus estimate of $0.09.
Reflecting special items, net earnings and diluted earnings per share on a GAAP basis were $12.1 million and $0.05, respectively, in the third fiscal quarter which compares to a net loss and loss per share of $94.5 million and $0.39, respectively, in the third quarter of the previous year.
"The IT spending environment remains challenging, but Q3 was a good quarter for BMC as we exceeded our EPS estimate, grew total revenues and licence revenues and completed our acquisition of Remedy," says Rob Clarkson, country manager, BMC South Africa. "Our Patrol business showed major improvement, and there was rapid takeup of Patrol Express, our new agentless monitoring solution."
Part of the reason behind BMC`s success was its penetration of the distributed database market with its new SmartDBA offerings, and its comprehensive strategy spanning all database platforms.
Total revenues in the third fiscal quarter were $349.6 million, an increase of 9% over the same quarter of fiscal 2002. Total licence revenues in the quarter increased to $168.5 million, up 11%. Maintenance revenues increased to $159.1 million, up 9%.
Total Remedy results, included in BMC`s third-quarter results, reflected revenues of $25 million and expenses of $15.3 million, excluding amortisation of intangibles, for the six-week post-acquisition period that began on 21 November 2002.
Cash flow from operations in the third fiscal quarter of 2003 was $48 million. Cash and marketable securities at 31 December were $900 million. The company continues to have no debt.
Third-quarter highlights:
* Total revenues, excluding Remedy, increased 1% year-over-year and 11% compared to Q2.
* Licence revenues, excluding Remedy, increased 1% year-over-year and 27% compared to Q2.
* Patrol licence revenues grew 53% compared to Q2.
* Company record for total deferred revenues of $1.1 billion, and deferred licence revenues of over $224 million.
* Cash flow from operations of $380 million in the first nine months of fiscal 2003.
* Completed acquisition of the Remedy business from Peregrine Systems for $355 million. The acquisition price was less than 1.5 times trailing 12 months revenues, with attractive operating margins and positive cash flows.
* Delivered the final component of Patrol 7, the Distribution Server, in December. The Distribution Server offers a solution for customers centrally to manage the deployment and installation of BMC distributed systems products in their environment.
* Announced its global enterprise data management blueprint, Project Golden Gate, which boosts interoperability and integration between management tools for mainframe and distributed database management systems with the SmartDBA console and technologies.
* Announced a global enterprise agreement in which Dell plans to standardise on and internally deploy BMC enterprise management solutions.
Outlook
BMC expects fourth-quarter fiscal 2003 revenues in the range of $374-$387 million and fourth-quarter expenses, excluding special items, to be in the range of $340-$350 million. Earnings per share excluding special items in the fourth quarter are expected to be in the range of $0.15 to $0.18. BMC expects fiscal 2003 diluted earnings per share, excluding special items, in the range of $0.46 to $0.49, compared to the previous estimate of $0.32 to $0.39.
BMC`s range of software solutions are exclusively distributed in SA by MGX Solutions.
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