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Autodesk $ADSK shares were wrecked 13% lower after it surprise restructuring plan with quarterly earnings Tuesday. ADSK said the plan was part of it's cloud growth phase. The software company will layoff 1,150 employees with the plan.

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Earnings: Net loss of $119.8 million, or 55 cents a share, on revenue of $515.3 million, up from $490 million a year ago net loss of 12 cents a share after adjusting for stock-based compensation and other expenses. This is a lower loss from an adjusted loss of 18 cents a share a year ago and the consensus adjusted loss of 13 cents a share on sales of $514 million, according to FactSet

Reaction: Autodesk, Inc.NASDAQ: $ADSK After-hours $116.10 -13.85 (-10.66%)

Autodesk shares had been on a tear (the overall US stock markets closed at record highs). Prior to the release $ADSK closed at $129.95, the second highest closing price in Autodesk's history. Clearly there was room to fall.

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Outlook

In a filing with the Securities and Exchange Commission $ADSK said that the restructuring plan "seeks to streamline the organization and re-balance resources to better align with the company's priorities." Autodesk said it plans to lay off about 13% of workers, which is approximately 1,150 employees.

"We're taking this restructuring action from a position of strength," said Chief Executive Andrew Anagnost Anagnost said the move was intended to change the focus of investments during a "growth phase" of the transition to cloud delivery. "This is not a cost reduction activity." 

The company anticipates taking a pre-tax restructuring charge in the range of $135 million to $149 million.  Approximately $91 million to $100 million in pre-tax charges will be taken in the fourth quarter of fiscal 2018.  The remaining charge will be taken in fiscal 2019.

Source: Autodesk; AlphaStreet

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