Autodesk (ADSK) posted $0.16 Q1 EPS (pro forma) on a 6.9% revenue decline. Merrill Lynch downgraded the shares to near term neutral from strong buy.
Analyst Jay Vleeschhouwer says the company's intermediate revenue outlook has been reduced below his recent vision, including the likelihood of a sequential decline in Q2. He says most of the weakness appears to stem from its Discreet division, its Japanese operations, and the winding down of the stand-alone AutoCAD upgrade cycle. Vleeschhouwer notes Design Solutions unit revenues fell slightly in Q1,and he thinks they will likely be lower again in Q2. He cut his $0.87 fiscal 2003 (ending January) EPS estimate to $0.83 and his $1.30 fiscal 2004 forecast to $1.25. He rates the shares long term strong buy.