Mentor Graphics Third Quarter Earnings Sneak Peek

Mentor Graphics Corp (NASDAQ:MENT) will unveil its latest earnings on Thursday, November 29, 2012. Mentor Graphics supplies electronic design automation systems and emulation systems used to automate the design, analysis, and testing of electronic hardware and embedded systems software.

Mentor Graphics Corp Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average analyst estimate is for profit of 21 cents per share, a decline of 19.2% from the company’s actual earnings for the year-ago quarter. During the past three months, the average estimate has moved up from 20 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 21 cents during the last month. Analysts are projecting profit to rise by 16.3% versus last year to $1.21.

Past Earnings Performance: The company has beaten estimates the last four quarters and is coming off a quarter where it topped forecasts by 7 cents, reporting net income of 16 cents per share against a mean estimate of profit of 9 cents per share.

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A Look Back: In the second quarter, profit rose more than fourfold to $18.2 million (16 cents a share) from $4.3 million (4 cents a share) the year earlier, exceeding analyst expectations. Revenue rose 12.7% to $240.8 million from $213.7 million.

Stock Price Performance: Between August 29, 2012 and November 23, 2012, the stock price fell $2.22 (-13.4%), from $16.60 to $14.38. The stock price saw one of its best stretches over the last year between January 13, 2012 and January 25, 2012, when shares rose for eight straight days, increasing 8.6% (+$1.12) over that span. It saw one of its worst periods between September 13, 2012 and September 26, 2012 when shares fell for 10 straight days, dropping 9.8% (-$1.68) over that span.

Wall St. Revenue Expectations: Analysts predict a rise of 5.9% in revenue from the year-earlier quarter to $265.3 million.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 4.8% in the third quarter of the last fiscal year, 4.2% in the fourth quarter of the last fiscal year and 7.8% in the first quarter before increasing again in the second quarter.

Analyst Ratings: With six analysts rating the stock a buy, none rating it a sell and one rating the stock a hold, there are indications of a bullish stance by analysts.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.7 last quarter. The current ratio is an indication of a firm’s liquidity and ability to meet creditor demands and generally, for every dollar the company owes in the short term, it has that figure available in assets that can be converted to cash in the short term.

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(Company fundamentals by Xignite Financials. Earnings estimates provided by Zacks)

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