NEW YORK (TheStreet) -- Shares of Mentor Graphics (MENT) were climbing 7.04% to $23.72 on heavy trading volume mid-afternoon Friday after the company's higher-than-expected results for the 2017 fiscal second quarter.
Following yesterday's market close, the Wilsonville, OR-based electronic design automation company reported adjusted earnings of 15 cents per share, surpassing analysts' forecasts of 9 cents per share.
Revenue was $254 million for the quarter, topping analysts' estimates of $245 million.
For the third quarter, Mentor Graphics projects earnings of about 42 cents per share on revenue of $310 million. Analysts are estimating earnings of 41 cents per share on revenue of $309.6 million.
Full-year earnings per share are expected to be about $1.68 on revenue of approximately $1.22 billion. Wall Street is looking for earnings of $1.84 per share on revenue of $1.22 billion for fiscal 2017.
DA Davidson downgraded shares to "neutral" from "buy" earlier today despite the "solid" results.
Management maintained its full-year view calling for modest 3% revenue growth and 8% earnings growth, the majority of which was driven by a significant share repurchase program early in the year, the firm noted.
"At this point it is apparently too difficult to ascertain if the upside in the quarter was simply a pull-in from business projected to hit later in the year or a true upside to expectations that would not be offset by other segments," DA Davidson wrote in a note.
The firm said it is moving to the sidelines as the stock approaches its $24 price target.
About 2.76 million of the company's shares traded so far today compared to its average volume of 710,801 shares per day.
Separately, TheStreet Ratings Team has a "Hold" rating with a score of C+ on the stock.
The primary factors that have impacted the rating are mixed. The company's strengths can be seen in multiple areas, such as its largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels and expanding profit margins.
But the team also finds weaknesses including deteriorating net income, disappointing return on equity and weak operating cash flow.
Recently, TheStreet Ratings objectively rated this stock according to its "risk-adjusted" total return prospect over a 12-month investment horizon. Not based on the news in any given day, the rating may differ from Jim Cramer's view or that of this articles's author.
You can view the full analysis from the report here: MENT