Let's All Get Excited Over Autodesk's Earnings Tomorrow

Autodesk has been on an earning rise, and the problem is that they need to keep it up. And up. And up. The difficulty, 'natch, is that the bigger you get, the smaller the percentages get. Look at the Google stock deflation when their earnings increased just 80%.

The key is to "manage expectation." Microsoft did that successfully for many, many years (until it stopped working for them). The idea is to downplay expecations of forthcoming profit announcements, and then act all surprised when profits exceed expectation -- causing the share price to shoot up.

We heard a bit of that in Autdoesk's last conference call, where they called for modest growth in the next Q, and left out earnings from Alias, which would now be included. In the last several days, however, we're starting to read stories from analysts saying that Autodesk profits are going to JUMP! For a detailed analysis, read Foolish Forecast: Autodesk Opens Its Drawers by Rich Smith of Motley Fool: "Autodesk has beaten analyst estimates for 25 straight quarters ... I see little reason to expect Autodesk to stumble tomorrow."

Update

I wuz rite:

Citing strong demand for its products, design-software maker Autodesk Inc. on Tuesday reported a fourth-quarter profit that topped expectations. - AP

Comments

[john beford]

Autodesk is encrypting the DWG file format. This is tantamount to blackmail against the users of ACAD. ACAD users will no longer be able to communicate share DWG files to anybody except not using Autodesk products.

This is a all time low for Autodesk. Imagine if Microsoft did this with XLS file format? What if Microsoft told the entire world only MS Office product are now capable of reading the xls format… Redmond would be under siege. I hope the community wakes up and informs Autodesk the users own their data, not Autodesk. They could do this simply by not upgrading to ACAD 2007. I bet the financial results would not exceed expectations next time.

http://www.evanyares.com/the-cad-industry/2006/1/11/autocad-2007-dwg-looks-like-bad-ju-ju.html

[Al Sossa]

One thing you can count on is that this author will always be an Autodesk supporter. At least we know where he stands and how he sees the world - in 2D of course.

[ralphg]

Al Sossa, it would appear, left his irony detector turned off.