Autodesk Inc. (ADSK:US) shares plunged the most in more than four years after the software maker lowered its annual sales forecast and said it plans to cut jobs as it restructures to focus on cloud and mobile computing.
The company will post fiscal 2013 revenue growth of 4 percent to 6 percent, less than a prior projection of at least 10 percent, as a slow economic recovery in Europe hampers sales, San Rafael, California-based Autodesk said in a statement yesterday. Autodesk slumped 16 percent to $30.13 at the close in New York, for the biggest drop since February 2008. The stock has lost 0.7 percent this year.
Autodesk, a maker of architectural and engineering software, in March unveiled new design tools and a revamped cloud-computing platform called Autodesk 360 that lets customers use programs over the Internet. The company said it will consolidate some leased facilities and reduce staff in the “near-term” as it expands in the cloud.
“Our own execution challenges, combined with an uneven global economy, resulted in disappointing revenue results for the quarter” ended July 31, Autodesk Chief Executive Officer Carl Bass said in the statement. “This restructuring is squarely focused on our continued transformation and shift to more cloud and mobile computing.”
The new forecast implies fiscal 2013 revenue (ADSK:US) of as much as $2.35 billion. Analysts anticipated $2.43 billion, the average (ADSK:US) of estimates compiled by Bloomberg. Autodesk also said that its operating margin will fall 2.1 percent instead of rising by 1.2 percent as previously forecast.
Sales in the second quarter increased 4.1 percent from a year earlier to $568.7 million, trailing the company’s forecast of $580 million to $600 million. Net income of $64.6 million, or 28 cents a share, fell short of its prediction of 29 cents to 34 cents.
Restructuring will result in a pretax charge of $50 million to $60 million, with the bulk of that coming in the third quarter ending in October. The company is eliminating 500 positions soon and then intends to hire about that many workers over the next year as it pushes into cloud computing, said Greg Eden, an Autodesk spokesman.
Sales in the Europe region, which is suffering from a sovereign debt crisis, fell 1 percent from a year earlier to $210 million. Revenue in the Americas rose 4 percent to $199 million.
“Essentially all territories and product areas were light,” Walter Pritchard, an analyst at Citigroup Inc., wrote in a note to clients. The report is “uncharacteristic of a company that generally executes well,” he wrote.
Autodesk is shifting away from traditional desktop-based computing and toward applications that can be delivered over the Web. As the largest seller of engineering software, its products have been used in everything from bridge design to the special effects in the movie “Avatar.”
Last month, the company said it’s spending $60 million to purchase Socialcam Inc. as it expands in the consumer market. Socialcam offers a smartphone application and Web-based service that lets users capture, edit and share videos.
“Despite our second quarter results, the changes better position Autodesk to meet the needs of our customers,” Bass said.
Autodesk also builds software for smartphones and Apple Inc. (AAPL:US)’s iPad, such as its SketchBook app, which can create drawings and paintings on touch screens. The company’s customer base includes about 12 million professionals and 80 million consumers.
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