PCB design software provider Mentor Graphics Corp. (MENT) reported Friday a profit for the fourth quarter compared to a loss last year, reflecting improved operating margins amid 'continued expense control' and revenue growth.
Adjusted earnings per share for the quarter topped analysts' expectations, while quarterly revenues missed their estimates. The company also provided earnings and revenue guidance for the first quarter and the full-year 2014, both below Street view.
"The fourth quarter was our sixteenth quarter in a row of exceeding non-GAAP earnings guidance. It capped a year in which Mentor Graphics achieved all-time records in revenue, operating margin and non-GAAP earnings per share," Chairman and CEO Walden Rhines said in a statement.
The Wilsonville, Oregon-based electronic design automation systems supplier reported net income of $61.75 million or $0.49 per share for the fourth quarter, compared to $57.82 million or $0.52 per share in the prior-year quarter.
Excluding items, adjusted net income for the quarter was $66.25 million or $0.58 per share, compared to $64.70 million or $0.58 per share in the year-ago quarter.
On average, six analysts polled by Thomson Reuters expected the company to report earnings of $0.55 per share for the fourth quarter. Analysts' estimate typically excludes one-time items.
Total revenues for the quarter grew to $331.24 million from $320.36 million in the same quarter last year, but missed six Wall Street analysts' consensus estimate of $343.18 million.
System and software revenue totaled $226.27 million, higher than last year's $220.05 million, and service and support revenues also rose to $104.97 million from $100.31 million in the year-ago quarter.
Operating margins for the quarter expanded 100 basis points to 21.5 percent from last year on lower operating expenses as a percentage of total revenues, despite gross margin contracting 40 basis points.
For fiscal 2013, the reported net income of $138.74 million or $1.17 per share, higher than $83.87 million or $0.74 per share in the prior year.
Excluding items, adjusted net income for the year was $161.45 million or $1.42 per share, compared to $127.21 million or $1.13 per share in the year ago.
Total revenues for the full year grew 7.3 percent to $1.09 billion from $1.01 billion in the previous year.
Analysts expected the company to report full-year 2013 earnings of $1.39 per share on annual revenues of $1.10 billion.
Looking ahead to the first quarter, the company expects adjusted earnings of about $0.05 per share on projected quarterly revenues of about $225 million. Analysts project earnings of $0.21 per share for the quarter, on revenues of $241.67 million.
For fiscal 2014, Mentor Graphics projects adjusted earnings of about $1.53 per share on anticipated annual revenues of about $1.155 billion. Street is currently looking for full-year 2014 earnings of $1.59 per share on revenues of $1.17 billion.
MENT closed Thursday's regular trading session at $17.71, up $0.65 on a volume of 3.81 million shares.
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