Citrix Earnings a Bright Spot

Proving that not all earnings news is bad news, Citrix Systems Inc. reported yesterday that it beat analyst expectations with $132.8 million in first-quarter net revenues, up 7.7 percent from last quarter and up 4.4 percent from the first quarter of 2000.

"We're very pleased with our Q1 business results, the positive strides we've made in execution, and how we're currently positioned with new and enhanced solutions for our customers," Mark Templeton, Citrix president, said in a conference call Wednesday afternoon.

Adjusted net income fell 28 percent from a year earlier to $33.9 million, or $0.17 per share, which was in line with analyst's estimates.

"In addition to meeting our financial objectives, we made significant progress in Q1 with our strategic goals in launching our MetaFrame XP family of products, announcing our intention to acquire leading portal software provider Sequoia, and bolstering the management team with the hiring of a new Chief Technology Officer and a new Vice President for the Europe/Middle East/Africa region," Templeton said.

Other financial highlights include:

• Sequential quarterly revenue growth of 7.7 percent and comparable quarterly year-over-year revenue growth of 4.2 percent.
• Electronic delivery of licenses this quarter amounted to 19 percent of product sales compared to 24 percent in the previous quarter.
• Operating margins, excluding the amortization of intangible assets relating to business combinations and technology write-down, increased during the quarter to 31.6 percent.
• Cash flow from operations was $56.9 million for the quarter.
• Cash and investments totaled $877.6 million at the end of the quarter.
• The company repurchased approximately 1.6 million shares of its common stock during the quarter.

During the quarter, Citrix introduced the next generation of MetaFrame for Windows operating systems with the launch of MetaFrame XP.

In March, Citrix announced a definitive agreement for Citrix to acquire Sequoia Software Corp. for $184.6 million. Citrix plans to add Sequoia's portal products and technology to its existing application serving software. The transaction is expected to close in the second quarter.

Citrix expects a 5-percent revenue growth for the second quarter, with revenue and earnings per share for 2001 both expected to grow in the low- to mid-20-percent range, according to Citrix CFO John Cunningham. "We remain positive but cautious in our business outlook," he said.