Autodesk, Inc. didn’t waste any time preparing the financial markets for disappointing news on its third quarter ended Oct. 31, 2008. The 2D and 3D design software company today announced preliminary results that reflect the economic woes now spreading across the globe.
The company said it expects total revenue in the range of $604 million to $607 million and GAAP earnings of $0.41 to $0.43 per diluted share.
Those numbers will beat year-earlier revenue of $538 million, a record quarter, and earnings of $0.35 per share, but will be down from second-quarter results and will fall well short of projections. In August, after the close of the second quarter, Autodesk executives were exulting in another record period, with revenue of $620 million and earnings of $0.39 per share. At the time, they called for $625 million to $635 million in third-quarter revenue and GAAP earnings of $0.40 to $0.42 per share.
Instead, the U.S. housing and financial crises erupted in September, creating a credit squeeze and belt-tightening that are now starting to choke off business transactions in many industries, including manufacturing.
“The sharp downturn of the global economy is substantially impacting our business,” said Carl Bass, Autodesk president and CEO, in a prepared statement today. “Demand for our products fell dramatically in October in all geographies as the financial crisis worsened.”
In fact, Bass warned, the credit crunch will continue to delay projects for the next few quarters. “While our currency hedge will provide a net benefit to our third quarter, the considerable strengthening of the U.S. dollar and our unusually low ending level of [order] backlog will likely create a significant headwind for the next few quarters,” he said.
Meanwhile, Autodesk is reducing costs to “position the company to emerge from this downturn in a stronger financial and competitive position,” Bass said.
Autodesk is certainly not the only enterprise software vendor to be feeling the squeeze. Last week, both Epicor and SAP said the souring economy had started to affect their business in late September. “In my 26 years at SAP, I’ve never witnessed such a sharp decline in customer spending in such a short period of time,” co-CEO Henning Kagermann said on a conference call with analysts last week.
Meanwhile, other companies such as PLM providers Dassault Systemes and PTC said their business held up well in the September-ended quarter.
Autodesk will announce its final third-quarter numbers on Nov. 20.