Mentor Graphics Corp Second Quarter Earnings Sneak Peek

Mentor Graphics Corp (NASDAQ:MENT) will unveil its latest earnings on Thursday, August 23, 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 estimate of analysts is for net income of 9 cents per share, a rise of 12.5% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 8 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 9 cents during the last month. Analysts are projecting profit to rise by 4.8% versus last year to $1.09.

Past Earnings Performance: Last quarter, the company beat estimates by 9 cents, coming in at profit of 26 cents a share versus the estimate of net income of 17 cents a share. It marked the fourth straight quarter of beating estimates.

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A Look Back: In the first quarter, the company swung to a profit of $28.2 million (25 cents a share) from a loss of $2.4 million (2 cents) a year earlier, beating analyst estimates. Revenue rose 7.8% to $247.9 million from $230 million.

Wall St. Revenue Expectations: Analysts are projecting a rise of 12.4% in revenue from the year-earlier quarter to $240.2 million.

Stock Price Performance: Between May 23, 2012 and August 17, 2012, the stock price rose $1.35 (9.2%), from $14.64 to $15.99. 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 July 5, 2012 and July 13, 2012 when shares fell for seven straight days, dropping 8.9% (-$1.38) over that span.

Key Stats:

On the top line, the company is looking to build on four-straight revenue increases heading into this earnings announcement. Revenue rose 13.7% in the second quarter of the last fiscal year, 4.8% in the third quarter of the last fiscal year and 4.2% in the fourth quarter of the last fiscal year before increasing again in the first quarter.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 1.69 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.

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.

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

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