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Cadence Design to Restate Earnings

The company is restating earnings for the first half of 2008 to correct a mistake in reporting its revenue.
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SAN FRANCISCO -- Cadence Design Systems (CDNS) said Wednesday that it would restate earnings for the first half of 2008 to correct past improper revenue recognition.

The San Jose, Calif., company, which makes software tools for integrated circuit design, had been due to report third-quarter results Wednesday. Those results will be released "as soon as practicable," the company stated.

Cadence's statement seems to explain

the sudden resignation of several top executives on Oct. 15

, including the chief executive.

Shares were down 22 cents, or 5.1%, to $4.10 in extended trading. The stock has dropped 75% year to date.

In a statement, Cadence said $24 million in revenue that had been recognized during the first quarter should have been recognized over the life of the contracts beginning in the second quarter.

Cadence reaffirmed prior guidance for third-quarter revenue of $235 million to $245 million and a loss of 9 cents to 11 cents a share, excluding special items. In July, the company lowered its full-year forecast.

Analysts are expecting a third-quarter loss, excluding items, of 11 cents on a top line of $236.3 million. Cadence posted revenue of $400.9 million and EPS of 33 cents in the third quarter of 2007.

Cadence has apparently been losing market share to competitors. In November,

Mentor Graphics


is expected to report 17.6% revenue growth year over year.



is expected to report 11.8% top-line growth in December.

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