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Autodesk struggles with economy

Earnings and revenue are down for the software maker compared with last year, despite good news in some segments.

Software maker Autodesk continues to struggle with the economy, reporting first-quarter profits that were down from a year ago but an improvement over the previous quarter.

Earnings for the quarter, which ended April 30, totaled $7.5 million, or 7 cents a share. That compares with $17.6 million and 16 cents a share in the same period a year ago and $6.4 million and 6 cents a share in the previous quarter.

Net revenue was $210.8 million, compared with $229.3 million a year ago and $196 million in the previous quarter.

Autodesk, which specializes in software for architectural drafting, mechanical design and computerized animation, has seen sales erode during the last two years, as the weak economy has hit key customer segments such as construction and consumer manufacturing. The company is best known for AutoCAD, the standard software that architects use to create design documents.

Autodesk went through several rounds of layoffs and enacted other cost-cutting measures in 2002.

Strongholds have included the company's Discreet division, which produces software for animators, game designers and other entertainment forms. Revenue from the Discreet division came in at $38 million for the quarter, an increase of 28 percent from the previous quarter and 8 percent from a year ago.

Autodesk CEO Carol Bartz said the company has been able to benefit from the booming market for video games and other forms of entertainment by offering graphics pros the tools that they need.

"The good news is that the entertainment industry is turning out to be one of the first to come out from the slump," Bartz said. "It's great that we're in enough industries that some are getting stronger, while others are still bouncing along the bottom."

The bottom dwellers include the construction industry, where Autodesk faces a double-whammy as the SARS epidemic slows nearly all economic activity in China, one of the company's fastest-growing markets. The company trimmed $7 million from its sales forecast for the current fiscal year due to SARS concerns.

?We think it's going to be limited to the (current) second quarter, but it's going to have an effect," Bartz said. "All of our folks (in China) are homebound; they can't make sales calls right now."

Elsewhere, however, architects and designers are responding enthusiastically to the new version of AutoCAD, Bartz said, thanks to enhancements that can significantly cut time from the design process.

"In this kind of economy, to allow people to do more with less is very important, and that's what people are saying is happening with the software," she said.

Autodesk expects flat to slightly improved results for the second quarter, with revenue between $207 million and $212 million and profits between 7 cents and 10 cents per share. For the full year, revenue is projected at $875 million to $900 million and earnings per share between 50 cents and 60 cents.