SAN FRANCISCO—EDA and IP vendor Synopsys Inc. Wednesday (Aug. 22) raised its profitability target for its current fiscal year for a second consecutive quarter after reporting sale in line with expectations and profitability that exceded analysts' estimates for the quarter ended last month.
"It was a very strong quarter," said Aart de Geus, Synopsys chairman and co-CEO. "Not only did we exceed on our earnings per share target but we were able to raise our earnings-per-share guidance for the year."
While semiconductor companies in recent weeks have largely pointed to softening business amid macroeconomic uncertainty, de Geus said Synopsys and other EDA vendors are less prone to volatile cyclicality because they cater to R&D, something that is more difficult for chip vendors to scale back on during typical cycles related to inventory buildup and other factors.
"Customers realize that the more competitive they are, the better chance they have of surviving a difficult economy," de Geus said.
Synopsys (Mountain View, Calif.) reported fiscal third quarter sales of $443.7 million, up 22 percent from the previous quarter and up 15 percent compared with the year-ago quarter.
The company reported a net income in accordance with generally accepted accounting principles (GAAP) of $75.7 million, or 50 cents per share, up 260 percent from the previous quarter and up 45 percent compared to the year-ago quarter.
Synopsys' net income for the previous quarter—the second quarter of fiscal 2013—was weighted down by $30.2 million of costs associated with the $523 acquisition of Magma Design Automation Inc., which closed in February.
On a non-GAAP basis, excluding charges, Synopsys reported a fiscal third quarter net income of $82.3 million, or 55 cents per share, up 21 percent compared with the year-ago quarter.
Synopsys' sales for the fiscal third quarter came in roughly in line with consensus analysts' expectations, while the company's non-GAAP earnings per share came in better than analysts expected.
For its fiscal fourth quarter, which closes in October, Synopsys said it expects sales to between $440 million and $448 million, with GAAP earnings of 22 to 28 cents per share and non-GAAP earnings of 46 to 48 cents per share. The company's sales guidance for the fiscal fourth quarter came up slightly short of consensus analysts' expectations, which called for sales of about $451.5 million, according to Yahoo Finance.
Synopsys said it now expects sales for the fiscal year—which also closes in October—to be between $1.74 billion and $1.75 billion. The company raised its non-GAAP earnings per share target for the fiscal year to between $2.09 and $2.11, up from an earlier target of between $2.03 and $2.07 per share.