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Mentor Graphics Q2 Profit Down, Tops View - Update

Chip-design software maker Mentor Graphics Corp. (MENT), Thursday reported a drop in profit for the second quarter, as higher revenues were offset by increase in operating costs. Nevertheless, both earnings and revenues for the quarter came in ahead of analysts estimates.

Wilsonville, Oregon-based Mentor Graphics' second-quarter profit dropped to $14.2 million or $0.13 per share from $24.0 million or $0.19 per share last year.

Adjusted earnings for the quarter declined to $16.5 million or $0.23 per share from $30.3 million or $0.26 per share last year. On average, eight analysts polled by Thomson Reuters expected earnings of $0.15 per share for the quarter. Analysts' estimates typically exclude special items.

Sales for the second quarter grew to $260.23 million from $253.22 million last year. Eight analysts had a consensus revenue estimate of $253.55 million for the quarter.

"System design strength, particularly with automotive customers, drove the second quarter with earnings solidly beating guidance," said CEO Walden Rhines.

Mentor Graphics provides electronic design automation software and hardware tools for designing and testing of complex electronic systems.

Operating expenses for the quarter rose to $194.4 million from $181.8 million last year.

Looking forward to the third quarter, the company expects earnings of about $0.07 per share, adjusted earnings of $0.21 per share and revenues of about $275 million. Analysts currently expect earnings of $0.39 per share on third-quarter revenues of $297.94 million.

For the fiscal year 2015, the company expect earnings of about $1.37 per share, down from its prior estimate of $1.46 per share.

The company continues to expect adjusted earnings of $1.75 per share and revenues of about $1.24 billion. Analysts currently expect full-year 2015 earnings of $1.76 per share on revenues of $1.24 billion.

The company declared a quarterly dividend of $0.05 per share, payable on September 30 to shareholders as of September 10.

MENT closed Thursday's trading at $21.43, up $0.20 or 0.94%, on the Nasdaq. The stock, however, dropped to $0.43 or 2.01% in after-hours trade.

by RTT Staff Writer

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