SAN FRANCISCO Top-tier EDA vendor Synopsys Inc. posted a net income of $7.6 million on revenue of $277.2 million for its fiscal third quarter, the company said Wednesday (Aug. 16).
The net income, which equates to 5 cents per share, was up 39 percent sequentially from $5.4 million in the fiscal second quarter, but down 56 percent year-to-year from $17.4 million in the third quarter of fiscal 2005. Fiscal third quarter income included a $33 million litigation settlement from Nassda Corp.
Revenue of $277.2 million was up less than 1 percent sequentially from $274.8 million in the fiscal second quarter and up 10 percent from $251.5 million in the same period of 2005.
Synopsys reported pro-forma income of 21 cents per share. The company's results came in above consensus analyst expectations, which had called for Synopsys to report revenue of $274.9 million and pro forma earnings of 19 cents per share.
"Our third quarter was excellent, as we again executed well on all fronts," said Aart de Geus, Synopsys chairman and CEO, in a statement. "Our momentum is visible through strong financial results, customer adoptions of our technology and the introduction of innovative new products."
Synopsys said it is targeting revenue for the current quarter of $274 million to $282 million. The company estimates that its pro-forma earnings will be in the range of 17 to 19 cents per share.
Consensus analyst expectations for the current quarter call for Synopsys to report revenue of $279.2 million and pro forma earnings of 20 cents per share.
Synopsys also slightly increased its guidance for fiscal 2006. The company said it now expects to report revenue of $1.086 billion to $1.094 billion for the year. Synopsys had said previously it expected to post fiscal 2006 revenue of $1.075 billion to $1.09 billion.
The company expects to report pro-forma earnings of 73 to 75 cents per share for the year and earnings of 11 to 15 cents per share based on generally accepted accounting principles (GAAP). The company had formerly said it expected pro-forma earnings of 68 to 74 cents per share, and GAAP earnings of 8 to 17 cents per share.
In an interview with EE Times following the earnings announcement, de Geus said the semiconductor industry remains "slightly more cautious than last quarter," but "still on a pretty good vector." He noted that consumption of electronics continues to grow, and that consumer electronics are incorporating more and more complex technology, good signs for the semiconductor industry and its support structure.
De Geus noted that chip vendors are once again focusing on technology. In the years following the burst of the tech bubble in 2001, he said, chip companies were highly focus on reducing inventory and squeezing cost out of their bottom lines.
"I think we've now started to enter the phase of, 'OK, how do we differentiate our product?' At this point, customers are a lot more focused on the technology," de Geus said. "They've moved focus from improving the bottom line to increasing top line growth."
He added that Synopsys is entering into many technology-focused engagements, which he said benefits the company.
"We certainly feel that we are in a good position at this point in time by virtue of the technology that we have to offer, and by virtue of the fact that the tech race is picking up again," de Geus said.
The ramp up of 65-nanometer designs has been more rapid than people expected, de Geus said. Synopsys is currently tracking more 243 active 65-nm designs, 80 of which have already taped out, he said.
During an analyst call, de Geus announced that Joe Logan has been promoted to head of the company's worldwide sales organization. Logan has been with Synopsys for five years, most recently as head of the North America East region, de Geus said.
Synopsys (Mountain View, Calif.) announced the completion of its $20.5 million acquisition of German lithography simulation vendor Sigma-C Software AG.