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dylan.mcgrath
For the record, I reached out to Synopsys to get more info about the tax ...
daleste
That cool when you can make more on your tax return than on you business. Seems ...
Synopsys' profit doubles on IRS settlement
Dylan McGrath
5/18/2011 5:18 PM EDT
SAN FRANCISCO—EDA and IP vendor said Wednesday (May 18) that its profit for the quarter ended April 30 more than doubled year-over-year thanks in part to a one-time tax benefit from a settlement with the U.S. Internal Revenue Service (IRS).
Synopsys (Mountain View, Calif.) reported sales for the quarter of $393.7 million, up 8 percent from the previous quarter and up 16 percent from the year-ago quarter. The company posted a net income in accordance with generally accepted accounting principles (GAAP) of $81.1 million, or 53 cents per share, up 68 percent from the previous quarter and more than double its GAAP net income of $39.5 million in the year ago quarter.
Synopsys said its net income for the quarter included a one-time $32.8 million tax benefit from a settlement with the IRS for fiscal years 2006 through 2009.
On a non-GAAP basis, excluding charges, net income for the quarter was $68.5 million, or 45 cents per share, up from $68.3 million in the previous quarter and $61.9 million in the year-ago quarter.
Synopsys exceeded consensus analysts' estimates for sales in the quarter of $390.6 million, according to Yahoo Finance. The company's non-GAAP earnings of 45 cents per share were in line with analyst expectations.
Aart de Geus, Synopsys chairman and CEO, said in an interview with EE Times following the quarterly report that Synopsys experienced broad strength across its product line during the quarter. The company's intellectual property business fared particularly well in the quarter, as did business in the Asia Pacific region, he said. De Geus said business remains strong but that customers are always concerned about conditions down the road.
"Obviosly the semiconductor industry is coming out of an amazing 2010 and looking at a very strong 2011," de Geus said. "But semiconductor people are by nature nervous Nellies, and with good reason."
But de Geus believes that end market demand for chips is very promising for the foreseeable future. He said the growth of smartphones and media tablets is driving new opportunities and that, beyond that, another wave of infrastructure improvements to support things like more video beamed to mobile devices also bodes well for the chip industry.
"In my opinion we've sort of reached another plateau of opprotunities with the silicon technology combing computation, communications and integration, making new applications possible," de Geus said.
Asked to comment on the situation at Mentor Graphics Corp.—where a proxy fight initiated by billionaire financier Carl Icahn has apparently succeeded in landing three Icahn representatives on the company's board—de Geus was diplomatic. "We don't compete on the basis of our boards," he said.
Asked if Synopsys might see some business upside if Mentor customers are afraid of the uncertainty that the proxy fight has created, de Geus avoided specifics. "We always have customers that worry about the long term stability of any of their suppliers," he said. "But ee don't sell on fear. In fact, we sell on the opposite of fear, which is risk minimization going forward. Synopsys has a degree of stability and technology leadership that has been very advantageous for us for many years."
For the current quarter, Synopsys said it expects sales to fall to be between $378 million and $386 million. The company said it expects to report GAAP net income of between 25 and 31 cents per share, and non-GAAP net income of between 41 and 43 cents.
Synopsys' guidance for the current quarter was in line with consensus analysts' expectations, according to Yahoo Finance.
For the fiscal year, Synopsys said it continues to expect sales of between $1.5 billion and $1.525 billion. The company said it now expects GAAP earnings per share for the year to be between $1.33 and $1.46, up from an earlier range of between $1.03 and $1.20. The company said it now expects non-GAAP earnings per share to be between $1.70 and $1.77, up from an earlier range of $1.67 to $1.77.
De Geus said Synopsys felt comfortable raising the low end of its guidance for the fiscal year after starting it with two consecutive strong quarters.
Synopsys (Mountain View, Calif.) reported sales for the quarter of $393.7 million, up 8 percent from the previous quarter and up 16 percent from the year-ago quarter. The company posted a net income in accordance with generally accepted accounting principles (GAAP) of $81.1 million, or 53 cents per share, up 68 percent from the previous quarter and more than double its GAAP net income of $39.5 million in the year ago quarter.
Synopsys said its net income for the quarter included a one-time $32.8 million tax benefit from a settlement with the IRS for fiscal years 2006 through 2009.
On a non-GAAP basis, excluding charges, net income for the quarter was $68.5 million, or 45 cents per share, up from $68.3 million in the previous quarter and $61.9 million in the year-ago quarter.
Synopsys exceeded consensus analysts' estimates for sales in the quarter of $390.6 million, according to Yahoo Finance. The company's non-GAAP earnings of 45 cents per share were in line with analyst expectations.
Aart de Geus, Synopsys chairman and CEO, said in an interview with EE Times following the quarterly report that Synopsys experienced broad strength across its product line during the quarter. The company's intellectual property business fared particularly well in the quarter, as did business in the Asia Pacific region, he said. De Geus said business remains strong but that customers are always concerned about conditions down the road.
"Obviosly the semiconductor industry is coming out of an amazing 2010 and looking at a very strong 2011," de Geus said. "But semiconductor people are by nature nervous Nellies, and with good reason."
But de Geus believes that end market demand for chips is very promising for the foreseeable future. He said the growth of smartphones and media tablets is driving new opportunities and that, beyond that, another wave of infrastructure improvements to support things like more video beamed to mobile devices also bodes well for the chip industry.
"In my opinion we've sort of reached another plateau of opprotunities with the silicon technology combing computation, communications and integration, making new applications possible," de Geus said.
Asked to comment on the situation at Mentor Graphics Corp.—where a proxy fight initiated by billionaire financier Carl Icahn has apparently succeeded in landing three Icahn representatives on the company's board—de Geus was diplomatic. "We don't compete on the basis of our boards," he said.
Asked if Synopsys might see some business upside if Mentor customers are afraid of the uncertainty that the proxy fight has created, de Geus avoided specifics. "We always have customers that worry about the long term stability of any of their suppliers," he said. "But ee don't sell on fear. In fact, we sell on the opposite of fear, which is risk minimization going forward. Synopsys has a degree of stability and technology leadership that has been very advantageous for us for many years."
For the current quarter, Synopsys said it expects sales to fall to be between $378 million and $386 million. The company said it expects to report GAAP net income of between 25 and 31 cents per share, and non-GAAP net income of between 41 and 43 cents.
Synopsys' guidance for the current quarter was in line with consensus analysts' expectations, according to Yahoo Finance.
For the fiscal year, Synopsys said it continues to expect sales of between $1.5 billion and $1.525 billion. The company said it now expects GAAP earnings per share for the year to be between $1.33 and $1.46, up from an earlier range of between $1.03 and $1.20. The company said it now expects non-GAAP earnings per share to be between $1.70 and $1.77, up from an earlier range of $1.67 to $1.77.
De Geus said Synopsys felt comfortable raising the low end of its guidance for the fiscal year after starting it with two consecutive strong quarters.
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daleste
5/18/2011 8:54 PM EDT
That cool when you can make more on your tax return than on you business. Seems like a bad time for the government to be giving back tax dollars.
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dylan.mcgrath
5/19/2011 5:38 PM EDT
For the record, I reached out to Synopsys to get more info about the tax settlement. The settlement covers a dispute about IRS audits of the company for fiscal years 2006 to 2009. It's not a payment the government made to Synopsys, but a reduction in the company's tax liability which boosted its bottom line.
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