Mentor Graphics Swings to a Loss

But revenue tops Street estimates.
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SAN FRANCISCO -- Mentor Graphics' (MENT) bottom line swung to a big loss for its first quarter Thursday, but the chip software company beat analysts' top-line expectations.

Shares were up 28 cents, or 2.8%, to $10.34 in recent trading.

Revenue at the Wilsonville, Ore., company fell 8% to $179.2 million. Analysts were expecting revenue of $170.1 million, according to Thomson Reuters.

Mentor, a developer of software tools for the design of integrated circuits, posted a loss of $27.5 million, or a loss of 30 cents a share, from net income of $290,000, or break-even on a per-share basis, one year ago.

Excluding special items, the company lost 10 cents a share, in line with analysts' expectations.

The company reaffirmed previous guidance for full-year revenue of $915 million and EPS, less items, of $1.05 to $1.10. Analysts expect revenue of $901.4 million and EPS of $1.03.

"In a difficult environment, the company performed as we forecast," Chairman and CEO Walden Rhines said in a statement.

"We extended our cost management efforts, resulting in virtually flat head count year over year, despite several acquisitions," said President Gregory Hinckley.

Total deferred revenue at the end of the quarter was flat year over year, at $172.7 million.

Gross margin was 81.1%, vs. 84.7% a year ago.

While some developers report a more difficult market for the chip-design industry this year, results are not consistent. On Wednesday, competitor

Synopsys

(SNPS) - Get Report

grew its top line by 10.8% for the quarter and beat analysts' earnings estimates. But in April,

Cadence Design Systems

(CDNS) - Get Report

posted a big drop on both the top and bottom lines.