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Mentor Graphics Swings to a Loss

But revenue tops Street estimates.

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.

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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


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