Mentor Graphics Earnings: Beats Wall Street Expectations

Mentor Graphics Corporation (NASDAQ:MENT) reported net income above Wall Street’s expectations for the second quarter. 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.

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Mentor Graphics Corporation Earnings Cheat Sheet

Results: Net income for Mentor Graphics Corporation rose to $17.6 million (16 cents per share) vs. $4.3 million (4 cents per share) in the same quarter a year earlier. This is a more than fourfold rise from the year-earlier quarter.

Revenue: Rose 12.7% to $240.8 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Mentor Graphics Corporation beat the mean analyst estimate of 9 cents per share. It fell short of the average revenue estimate of $254.9 million.

Quoting Management: “Revenues and earnings were an all-time record for a second quarter, and bookings were at the second highest level for any second quarter in company history,” said Walden C. Rhines, chairman and CEO of Mentor Graphics. “Like the whole electronic design automation industry, Mentor is benefiting from the transition to 20nm and 28nm which is driving significant design activity and resultant software demand. Additionally, the company’s investments in system design, and non-traditional electronic design automation markets like embedded software, helped produce the strong results in the quarter. We are on track for record revenue and earnings for fiscal year 2013.”

Key Stats:

The company has now surpassed analyst estimates for four quarters in a row. It beat the mark by 9 cents in the first quarter, by 11 cents in the fourth quarter of the last fiscal year, and by 14 cents in the third quarter of the last fiscal year.

Revenue has risen the past four quarters. Revenue increased 7.8% to $247.9 million in the first quarter. The figure rose 4.2% in the fourth quarter of the last fiscal year from the year earlier and climbed 4.8% in the third quarter of the last fiscal year from the year-ago quarter.

Last quarter, gross margins grew to 80.7%, a 1.2 percentage points difference from the year-earlier quarter. This ends a streak of two consecutive quarters of shrinking margins.

Looking Forward: The average estimate for the third quarter is steady at 16 cents a share. At $1.09 per share, the average estimate for the fiscal year has risen from $1.01 sixty days ago.

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

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