Autodesk shares fall as guidance for current quarter falls short; outlook signals higher costs

Ahead of the Bell: Autodesk falls after forecast

NEW YORK — Autodesk shares slid Wednesday after the design and engineering software maker’s guidance implied higher costs, analysts said, and lower profit than Wall Street had expected.

The company said on Tuesday that in its fiscal first quarter ending in April, operating profit margins would be flat or down from a year ago. That signals that the company expects higher costs over the next six months, analysts said.

Shares dropped $1.98, or 7.3 percent, to $25.02 in premarket trading.

Meanwhile, the profit forecast for the current quarter fell short. Autodesk expects adjust earnings of 19 cents to 24 cents per share and revenue in the range of $420 million to $440 million. Analysts polled by Thomson Reuters had expected per-share profit of 25 cents on sales of $433.5 million.

The margin forecast means operating expenses will likely rise faster than sales over the next six months, said Jefferies & Co. analyst Ross MacMillan in note to clients, especially as the fiscal first quarter ending in April is a “seasonally weak” period for the company.

Autodesk’s third-quarter results topped analysts’ expectations, however, and it said its business looked “increasingly stable” despite rising unemployment and pressure on its customers.

Deutsche Bank analyst Greg Dunham cut his profit forecast from $1.30 to $1.20 per share for 2011, but said his old estimate was still “reasonable.”

Wall Street analysts expect earnings per share of $1.16 for the year ending January 2011.