Had an intersting chat today with Jay Vleeshhouwer, formerly of Merrill Lynch. For those few of you that don't know him, Jay is a grand master "sell-side" analyst, on of the few who actually cover our industries as a market, rather than just dabbling in a few of the stocks from our sector. The conversation turned to the economy, the automotive sector, then to Chrysler and the recent NY Times article about Chrysler's cutback in its design staff. Jay made the following interesting observations:
"These changes at Chrysler may put, or has already put, some pressure on Dassault’s US auto recurring revenues (for CATI, its largest product), albeit low-single digit percent of total business…..maybe offset to some degree with non-US usage. Dassault Systemes is probably the most heavily exposed to auto as a vertical. Generally speaking, for the group, besides the obvious pressures on new license sales, we’ll need to keep an eye on maintenance too. It’s conceivable for instance that in the April quarter, Autodesk’s maintenance-paying subscriber base, which had a net increase of a mere 8000 users in 4QFY09 (90,000 new 2D/3D seats were sold), could decline sequentially."
Jay and I will be release a new survey next week. We'd appreciate your input and opinion when it opens.