BMC: Even Software is Bigger in Texas (BMC)

BMC Software (NYSE:BMC), one of the few major local software and business service management for large enterprise organizations, is seeing shares jump another 4% in after-hours trading.  The company posted Q1 2008 EPS at$0.28 GAAP and non-GAAP EPS at $0.37 on revenues of $385 million.  First Call estimates were $0.34 non-GAAP EPS and $375.1 million in revenues.

According to the company, this marks the ninth straight quarter where it met or beat guidance.  Its license bookings rose 55%, and total bookings rose 19%.  The company says this is a precursor to strong cash flow in future quarters. 

Q2 2008 GUIDANCE: BMC expects non-GAAP earnings per share in the range of $0.39 to $0.44 per share, assuming an effective tax rate of 30 percent and excluding an estimated $0.09 of special items, and puts revenues at $395 to $410 million.  ESTIMATES: First Call lists $0.41 EPS and $401.2M revenues, so this guidance is in-line to above-target if you use the mid-point of the range.

FISCAL 2008 GUIDANCE: BMC sees fiscal 2008 non-GAAP earnings per share to be in the range of $1.69 to $1.79 per share, assuming an effective tax rate of 30 percent and excluding an estimated $0.33 of special items.  The Company now expects fiscal 2008 revenue growth in the mid-single digits with margin improvements (at 5% growth, this would be an interpolated $1.66 Billion in revenues).  ESTIMATES: First Call has $1.68 EPS and $1.65 Billion, so the earnings are above (including this and next quarter gains) and revenues are in-line depending upon you ‘mid-single digit gains’ guestimate.

As a reminder the company is also in that large share buyback plan just recently announced.  Shares closed up 1.4% today at $27.79, and shares are 4% after the report at almost $29.00.  BMC’s 52-week trading range is $22.73 to $36.92.  Based on the mid-point of 2008 EPS targets from the company and based on a $29.00 static share price, the stock now trades with a forward P/E ratio of 16.6 (before any additional shares retired from buybacks).

Jon C. Ogg
August 6, 2007

Jon Ogg can be reached at [email protected]; he does not own securities in the companies he covers.