Autodesk's Black Eye... Misses Earnings, Guides Lower in Q3 and for Fiscal Year

Autodesk, Inc. (NASDAQ: ADSK) has released what is nothing short of a disappointing second quarter earnings report.  Its non-GAAP earnings per share were $0.48 versus $0.44 a year ago, while sales came in with a 4% gain to $569 million. Thomson Reuters had estimates of $0.49 EPS and $593.4 million in revenue.

For the coming quarter Autodesk is expecting non-GAAP earnings of $0.40 to $0.45 per share and revenue of $550 to $570 million. Thomson Reuters had estimates of $0.50 EPS and $601.2 million in sales.  Autodesk sees its 2013 fiscal net revenue increasing by 4% to 6% versus fiscal 2012, and non-GAAP operating margin is expected to grow by approximately 150 basis points. Unfortunately, Thomson Reuters is calling for growth in sales of almost 10% (9.7%) rather than 4% to 6%).

For the quarter we saw that non-GAAP operating margin was flat at 25% percent, while GAAP margin was down 1% to 16%. Cash flow from operating activities was $107 million, compared to $132 million in the second quarter of fiscal 2012.

The company talked about its own execution challenges and an uneven global economy contributing to disappointing revenues after some internal changes made within the company slowed it down.  The company CEO noted, “Given the uneven macroeconomic environment and the company’s desire to deliver operating margin improvement, we have taken a prudent approach to spending in fiscal 2013.”

Autodesk shared plans for a restructuring including its ongoing shift to cloud and mobile computing.  The company is reducing its overall staffing levels and intends to consolidate certain leased facilities. The company sees a pre-tax charge of $50 million to $60 million based on the restructuring, and $40 million to $45 million of the pre-tax charges will be taken in the third quarter of fiscal 2013 with most of the remaining charge will be taken in the fourth quarter of fiscal 2013.

Today was not a good report.  Shares closed 0.6% at $35.71 against a 52-week range of $24.63 to $42.69. Shares were halted ahead of the report.

UPDATE AT 4:28 PM EST: ADSK shares now down 20% at $28.35.  Get ready for one ugly Friday here.

JON C. OGG