Aspen Technology Shakes Bad Cisco Mojo, Shares at 12-Year High

Andrew Klips |

Software stocks took a hit on Thursday after Cisco Systems Inc. (CSCO) said after Wednesday’s closing bell that it will be cutting 5 percent of its workforce and lowered its outlook for the year.  Shares of Cisco closed 7 percent lower on Thursday.  Cisco’s news also weighed on shares of Aspen Technologies, Inc. (AZPN) ahead of its earnings release that was coming after Thursday’s closing bell.

Aspen reversed course in extended trading, however, with its results from the fiscal fourth quarter showing that the Burlington, Massachusetts-based company swung to a profit, crushing Wall Street expectations as subscriptions rose.  Aspen supplies software products and services for the analysis, design and automation of process manufacturing facilities.

For the quarter, Aspen reported total revenue of $83.3 million, up 30 percent from $64.0 million in the year prior quarter.  Net profit for the quarter was $20.4 million, or 21 cents per share, versus a net loss of $5.4 million, or 6 cents a share, in the same quarter of 2012.  Adjusted profit, which excludes stock based compensation, restructuring costs and other one-time items, was $22.7 million, or 24 cents per share, compared to an adjusted loss of $3.5 million, or 4 cents per share, last year.

Analysts expected an adjusted profit of 8 cents per share on revenue of $78.79 million.

Subscription and software revenue was $65.2 million in the fourth quarter, up 42 percent from $45.8 million in the same quarter last year.  Services and other revenue slipped from $18.2 million to $18.0 million.

Even with the increased sales, total cost of revenue was kept essentially flat.  Total operating expenses increased modestly from $54.53 million to $54.89 million.

Gross profit rose to $70.28 million from $50.92 million the year prior.  Gross margin improved from 79.5 percent to 84.4 percent.

“The company outperformed on each of its key financial metrics during fiscal 2013, highlighted by 13% total license contract value growth, 43% free cash flow growth, and better than expected profitability,” said Mark Fusco, chief executive of AspenTech.

For all of fiscal 2013, Aspen reported total revenue of $311.4 million, a 28-percent increase from $243.1 million in fiscal 2012.  Total cost of revenue was down 3.7 percent and total operating expenses were essentially flat.

Shares of AZPN were up about 15 percent so far in 2013, including the losses during regular trading on Thursday.  Following the earnings news, shares jumped ahead by 14 percent to $36.40, hitting their highest level in more than 12 years.

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Companies

Symbol Name Price Change % Volume
AZPN Aspen Technology Inc. 52.90 0.76 1.46 162,635
CSCO Cisco Systems Inc. 29.59 0.34 1.16 8,312,584
MTNOF Mtn Group Ltd Ord 8.26 0.00 0.00 0

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