Cadence Design Q3 Tops Wall Street, Outlook Strong; Shares Up

(RTTNews) - Shares of Cadence Design Systems Inc. (CDNS) jumped 12% on the Nasdaq after the company reported a third-quarter profit and revenues that trumped Wall Street estimates. Moving ahead, the company detailed a strong outlook for the fourth quarter and also lifted its full-year guidance.

The San Jose, California-based company reported third-quarter profit of $99.3 million or $0.35 per share, up from $81.2 million or $0.29 per share last year.

On an adjusted basis, profit rose to $137 million or $0.49 per share form $98 million or $0.35 per share last year. On average, 8 analysts polled by Thomson Reuters expected the company to earn $0.41 per share for the quarter. Analysts' estimates typically exclude one-time items.

Revenues for the quarter grew to $532.5 million from $485.4 million last year. Analysts had a consensus revenue estimate of $516.45 million for the quarter.

"Broad-based strength across our product lines enabled Cadence to achieve outstanding operating results for the third quarter," said Lip-Bu Tan, chief executive officer. "We also continued to innovate and launch new products, including the industry's first silicon-proven, 7-nanometer long-reach 112G SerDes IP and the Tensilica® DNA 100 Processor IP targeted at deep neural-network applications."

Looking forward to the fourth quarter, the company expects revenue of $545 million to $555 million and adjusted earnings of $0.46 to $0.48 per share. Analysts currently estimate earnings of $0.42 per share and revenues of $529.63 million.

For the full year 2018, the company now expects revenues of $2.113 billion to $2.123 billion and adjusted earnings of $1.80 to $1.82 per share. Analysts currently estimate earnings of $1.68 per share and revenues of $2.08 billion.

Earlier, the company expected earnings of $1.64 to $1.70 per share and revenues of $2.070 to $2.090 billion.

The company also increased its share buyback to $75 million for the fourth quarter.

CDNS closed Monday's trading at $40.61, up $0.50 or 1.25%, on the Nasdaq. The stock further gained $4.79 or 11.80% in the after-hours trade.