The Gory Details on BMC Software's Double Fumble

Seth Jayson, The Motley Fool
Updated

BMC Software (NAS: BMC) reported earnings on May 6. Here are the numbers you need to know.

The 10-second takeaway
 For the quarter ended March 31 (Q4), BMC Software missed estimates on revenues and missed estimates on earnings per share.

Compared to the prior-year quarter, revenue grew slightly. Non-GAAP earnings per share grew significantly. GAAP earnings per share expanded significantly.


Gross margins grew, operating margins shrank, net margins grew.

Revenue details
 BMC Software logged revenue of $568.6 million. The 11 analysts polled by S&P Capital IQ expected revenue of $592.9 million on the same basis. GAAP reported sales were the same as the prior-year quarter's.

Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.

EPS details
 EPS came in at $0.87. The 13 earnings estimates compiled by S&P Capital IQ averaged $0.93 per share. Non-GAAP EPS of $0.87 for Q4 were 18% higher than the prior-year quarter's $0.74 per share. GAAP EPS of $0.50 for Q4 were 16% higher than the prior-year quarter's $0.43 per share.

Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.

Margin details
 For the quarter, gross margin was 74.1%, 240 basis points better than the prior-year quarter. Operating margin was 18.6%, 20 basis points worse than the prior-year quarter. Net margin was 12.8%, 30 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)

Looking ahead
 Next quarter's average estimate for revenue is $532.2 million. On the bottom line, the average EPS estimate is $0.81.

Next year's average estimate for revenue is $2.33 billion. The average EPS estimate is $3.92.

Investor sentiment
 The stock has a five-star rating (out of five) at Motley Fool CAPS, with 323 members out of 345 rating the stock outperform, and 22 members rating it underperform. Among 117 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 114 give BMC Software a green thumbs-up, and three give it a red thumbs-down.

Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on BMC Software is hold, with an average price target of $44.58.

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The article The Gory Details on BMC Software's Double Fumble originally appeared on Fool.com.

Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor ofMotley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool owns shares of BMC Software. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.

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