How Autodesk Weathers the Crash

Even in the depths of the tech crash, Autodesk (ADSK) wasn't among the many that warned of earnings shortfalls or missed estimates. And its stock, trading at 47 a year ago, has suffered only a relatively mild setback and is now at 30. At the company's annual meeting with analysts in early April, CEO Carol Bartz was upbeat: The first quarter is on track, demand has stayed constant, and revenue growth will range from 10% to 20%. Autodesk surpassed estimates and earned a record $109 million, up 82%, in fiscal 2001 on sales of $1 billion--incredible in the current tech world. Jay Vleeschhouwer of Merrill Lynch has raised his rating on the stock to "accumulate" from neutral. He expects earnings of $2.20 a share in 2002 and $2.70 in 2003, vs. $1.87 in 2001.

What's Autodesk's secret? Countless architects, engineers, and others use Autodesk's software to design products, buildings, and infrastructure projects, such as roads, bridges, and utilities. Autodesk's business, in a way, is resistant to downturns: "Our customers tend to buy our products to improve productivity and profitability," says Bartz. Autodesk, which makes software for visual effects and 3-D animation used in creating digital pictures for films, video, and the Web, has teamed up with Microsoft to use its 3-D tools to develop prototype games for Microsoft's Xbox video-game system.

By Gene G. Marcial

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