Electronic design automation company Synopsys, Inc. (SNPS), Wednesday reported a rise in profit for the fourth quarter as revenues grew over 4 percent. Adjusted earnings for the quarter came in line with Street estimates as did revenues. The company's outlook for fiscal 2012 is also in line with Street view. Separately, Synopsys announced an agreement to acquire chip design software provider Magma Design Automation Inc. (LAVA), for about $507 million, at about 28 percent premium over Magma's closing price on Wednesday. MAgma shares are up over 25 percent in extended trading.
For the fourth quarter, Mountain View, California-headquartered Synopsys' net income rose to $39.9 million or $0.27 per share from $25.4 million or $0.17 per share in the year-ago period.
Results for the year-ago quarter included acquisition-related costs of $10.8 million or $0.07 per share.
On a non-GAAP basis, net income for the quarter was $65.3 million or $0.45 per share, rising from $59.9 million or $0.39 per share last year.
On average, 7 analysts polled by Thomson Reuters expected earnings of $0.45 per share for the quarter. Analysts' estimates typically exclude special items.
Revenues for the quarter grew to $390.5 million from $375.5 million in the year-ago quarter. Seven Street analysts had a consensus revenue estimate of $390.1 million for the quarter.
For fiscal year 2011, GAAP net income dropped to $221.4 million or $1.47 per share from $237.1 million or $1.56 per share in fiscal 2010. Non-GAAP net income for the year was $270.3 million or $1.80 per share, rising from $242.4 million or $1.60 per share for fiscal 2010. Revenue for the full year grew 11.2 percent to $1.536 billion from $1.380 billion in fiscal 2010. Street expected earnings of $1.80 per share for the full year on revenues of $1.540 billion.
Aart de Geus, chairman and CEO, said," Our customers continue to drive design aggressively, even in the context of economic uncertainty. Our combination of advanced technology and support expertise is helping to solve the most pressing technical challenges."
For the first quarter of fiscal year 2012 which includes an extra week, the company expects GAAP earnings per share of $0.33 - $0.38, non-GAAP earnings per share of $0.51 - $0.53, on revenues of $412 million - $420 million. Street currently expect earnings of $0.46 per share for the first quarter on revenues of $389.0 million.
For full fiscal year 2012, the company expects double-digit growth of non-GAAP earnings per share, continuing with results for fiscal 2011. GAAP earnings for fiscal 2012 are expected in a range of $1.28 - $1.44, and non-GAAP earnings in a range of $1.93 - $1.99. Full-year revenues are expected in a range of $1.640 billion - $1.665 billion. Street currently expect earnings of $1.96 per share for fiscal 2012 on revenues of $1.650 billion.
Synopsys has agreed to acquire San Jose, California-headquartered Magma for $7.35 per Magma share in cash, resulting in a transaction value of approximately $507 million net of cash and debt acquired. The boards of directors of both companies have unanimously approved the transaction.
Synopsys expects the merger to close in the second calendar quarter of 2012, subject to Magma stockholder and regulatory approval. If the closure goes to plan, Synopsys anticipates the merger to be modestly accretive to non-GAAP earnings per share in its fiscal 2012.
de Geus stated," This acquisition will enable Synopsys to accelerate the delivery of the technology our customers need to keep the overall cost of design in check."
SNPS closed Wednesday's regular trade at $27.97, up $0.93 or 3.44%. Over the past year, the stock traded in a range of $21.37 - $29.35.
LAVA closed Wednesday at $5.72, up $0.17 or 3.06%, on the Nasdaq. In after-hours, the stock gained $1.47 or 25.70% to $7.20. Over the past year, the stock traded in a range of $4.03 - $8.50.
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