Aspen Technology Returns to Profit, Beats Q1 Estimates (AZPN)

Software solutions provider Aspen Technology (NASDAQ: AZPN) reported a fiscal 2013 first-quarter net income compared to a net loss in the first-quarter of fiscal year 2012. The revenue for the first quarter rose 40% compared to the year-ago corresponding period. The company comprehensively beat the revenue and earnings estimates of analysts. Aspen also announced a new $100 million share repurchase program.

The Massachusetts-based company provides integrated solutions to manage and optimize plant and process design, operational performance and supply chain planning. Sectors served by Aspen include energy, chemicals, construction, pharmaceuticals, consumer packaged goods, power, mining, pulp and bio-fuels.

Total revenues for the fiscal 2013 first quarter increased to $71.45 million from $51.23 million in the prior-year similar period. The revenue estimate of analysts was $64.99 million for the first quarter of 2013. Segment wise, subscription and software revenue was $54.1 million while services & other revenue was $17.4 million in the first quarter of fiscal 2013.

Net income for the reported quarter was $4.41 million, or $0.05 per share, compared to a net loss of $11.74 million, or $0.12 per share, in the first quarter of fiscal 2013. The EPS estimate of analysts was $0.02 per share for the quarter.

Non-GAAP net income, which includes stock-based compensation expense, restructuring charges and amortization of intangibles associated with acquisitions, was $7.3 million, or $0.08 per share, for the first quarter of fiscal 2013, compared to a non-GAAP net loss of $9.2 million, or $0.09 per share, in the same period last fiscal year.

Beginning in April 2009, Aspen appreciated considerably from around $10.00 per share without any major corrections. After trading in the range of $15.00 to $17.00 per share for the entirety 2011, Aspen hit the $20.00 per share mark in the last week of January 2012, aided by fiscal 2012 second-quarter results that beat estimates. On April 3, Brigantine initiated coverage of Aspen with a “buy” rating. The move favored another uptrend in share price, which touched $23.15 per share on June 25. The fiscal 2012 fourth-quarter results declared on August 22 beat estimates and elevated the share price to the 52-week high of $26.33 on September 10.

Reflecting Aspen’s turnaround, the share price opened trading on November 1 with a positive gap of around 5% and continued to rise without any major resistance. Within half an hour of trading, the shares gained over 7% on a volume of around 150,000 shares. After touching a high of $27.10 per share, the share price retraced by around 50 cents and traded at around $26.50 for the rest of the day without any major swings.

Aspen also replaced the prior share repurchase program, which had approximately $49 million of remaining capacity, with a newer $100 million program.

Commenting on the results, Mark Fusco, CEO of AspenTech, said, “AspenTech began fiscal 2013 on a strong note, highlighted by mid-teens year-over-year growth in total license contract value. We continue to expand the capabilities of our industry leading aspenONE suite, and believe that we remain well positioned to drive increased product adoption and usage levels over the long-term. At the same time, our focus on expense management contributed to strong growth in profitability and free cash flow generation.”

Aspen ended the day at $26.90 per share on November 1, up $2.12 or 8.6% on a volume of 1.36 million shares.

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Published by Steve Hackney

Steve Hackney is a corporate finance professional with over 14 years of experience in cash management and investing. He earned a Bachelor of Science in Finance from Florida State University and holds a Certified Treasury Professional certification. Steve lives in Orlando, Florida with his family.