These Two Software Makers Will Rebound

Article Excerpt

AUTODESK, INC. $19.21 (Nasdaq symbol ADSK; SI Rating: Average) (515-507-5000; www.autodesk.com; Shares outstanding: 226.3 million; Market cap: $4.3 billion) makes AutoCAD, the world’s top-selling computer aided design program. About four million architects and engineers in over 100 countries use it to design and test new buildings and products. This business supplies nearly 90% of its revenue. The remainder comes from programs that filmmakers use to create special effects. Revenues in the fiscal third quarter ended October 31, 2008 rose 12.8%, to $607.1 million from $538.4 million, thanks to an acquisition, favorable exchange rates and strong sales in emerging markets. Sales of the company’s advanced 3D design software (27% of total revenues) also contributed to the higher results. Earnings per share excluding one-time items rose 13.6%, to $0.56 from $0.49. The stock now trades at 11.6 times next year’s forecast earnings of $1.65 a share. That’s reasonable in light of Autodesk’s growth prospects and high research spending. Autodesk spends over 22% of its revenue…