AVEVA today tantalized financial markets with good news that sent its share price up 5%. Turns out that the last half of fiscal 2013 (ended March 31) wasn’t awful. In fact, it was pretty good.
The company says it continues to see good demand for its engineering solutions, and that the new Everything 3D (E3D) is “well received” and that customers are “enthusiastic”, though there is as yet no revenue contribution. The Enterprise Solutions business became profitable in H2, as revenue growth was “strong”. As a reminder, the engineering solutions part of the business was almost 90% of revenue in H1, so remains the engine of AVEVA’s growth. Bocad contributed £2 million in its first four months as part of AVEVA; we’ll be looking to see if that accelerated in H2.
By end-user vertical, AVEVA says everything is pretty much consistent with expectations and prior periods, as its design tools business saw strong demand from oil and gas customers, “steady growth” in power as the marine market remained “depressed”. That growth in oil and gas is very good news, as that sector accounted for just under half of AVEVA’s revenue in the first half of 2013.
By geo, EMEA was “strong”, Latin America had “weakness” as a result of project delays and Asia “performed well”, especially China.
AVEVA will provide more details on May 23. Analysts have a consensus revenue forecast of £220 million, up 12% — today’s news doesn’t do anything to change that model.
Why does AVEVA’s tease matter? Because it gives us a first glimpse into the early part of 2013 — other public companies start reporting March quarter results later this week. If they all report as did AVEVA, it’s going to be a good earnings season.