Schnitger Corporation

AVEVA hints at good Q3, is “performing well”

EarningsAVEVA today issued one of its periodic interim statements, press releases that don’t say much but hint a lot. The big headline: things are going well and conditions haven’t changed since the company’s November report.

AVEVA said that business in Latin America is soft; Asia is growing steadily as a stronger South Korea offsets a weakening China; and results from EMEA are beset by weakness in Russia and the Middle East. The biggest geographic bright spot may be in North America, where the company says it is making “good progress” after years of being stalled.

By business area, Engineering and Design Systems continues to roll along, closing a major corporate deal with a large EPC in North America. This is big; deals with engineering contractors are often on a project bases, which means that they might not be renewed when the EPC moves on to the next project. By hammering out the deal at the corporate level, AVEVA will be able to engage across projects, locations and teams. In theory, more people will have access to its solutions — let’s see how this works out.

No real update on AVEVA Everything 3D adoption other than “two of AVEVA’s major existing global EPC customers now including the product in their license agreements”. Many more than two spoke about investigating E3D at AVEVA’s global user conference in November, so expect more announcements along these lines. Since E3D uses the same underlying database structure as PDMS, the transition is more about training and supply chain than about parts conversions.

As we heard last week from PTC, enterprise data management deals continue to be tough to close, with longer sales and approval cycles. AVEVA’s Enterprise Solutions division struggled during the first half of fiscal 2014 and that doesn’t seem to have changed as we enter H2. On the positive front, AVEVA says that Chevron went live with AVEVA NET on the Gorgon project, one of the largest liquified natural gas projects ever conceived. [If you’re at all interested, Gorgon is an amazing engineering feat. Off the coast of Australia in an ecologically sensitive area, Chevron and its contractors have to stage delivery of materials and plan construction on a small, remote island. This is Chevron’s Gorgon website, and a YouTube search will bring you to videos of the site and project progress presentations. It’s worth a few minutes to check it out.]

Back to AVEVA. The company’s fiscal year ends in March. There will be a press release hinting at how things went during Q4 sometime in late April and then actual results come out in May.

What does it all mean? No details, but Q3 sounds good. The headlines in the UK are “AVEVA Group Still Expects Solid Cash Generation In Q3“, “Continues to perform well“, and “Solid Trading”. We’ll have to go with that.

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