Thursday, Mentor Graphics Corp. (MENT), reported a second quarter loss that widened from last year, hurt by higher costs and certain one time charges. Adjusted earnings for the quarter, however, were well ahead of the analysts' estimates.
The electronic hardware and software design solutions company's net loss for the second quarter widened to $21.27 million or $0.22 per share from $17.80 million or $0.19 per share in the previous year. Results for the second quarter includes non-GAAP adjustments of $22.73 million, compared to $16.26 million in the year-ago quarter.
On an adjusted basis, the company reported a net income of $1.46 million or $0.02 per share for the second quarter, compared to a loss of $1.54 million or $0.02 per share last year.
On average, three analysts polled by Thomson Reuters expected the company to report loss of $0.10 per share for the second quarter. Analysts' estimates typically exclude special items.
Total revenues for the quarter increased to $182.62 million from $182.40 million last year. Three analysts had a consensus revenue estimate of $165.77 million for the second quarter.
System and software revenues for the quarter increased to $103.88 million from $95.83 million last year. Service and support revenue declined to $78.73 million from $86.57 million in the previous year.
Total cost of revenues increased to $32.96 million from $30.38 million a year ago. Gross margin declined to $149.66 million from $152.03 million last year.
Amortization expenses increased to $2.89 million from $2.54 million a year ago. Special charges for the quarter increased to $4.20 million from $3.23 million in the previous year.
Total operating expenses for the quarter declined to $161.16 million from $181.93 million in the prior year quarter.
For the six-month period, net loss narrowed to $34.22 million or $0.36 per share from $43.29 million or $0.48 per share in the same period of the previous year. Total revenues for the period increased to $376.40 million from $361.61 million a year ago.
Looking forward, the company expects to report non-GAAP earnings of $0.01 per share on revenues of $183 million for the third quarter of fiscal 2010. Analysts expect a loss of $0.02 per share on revenues of $179.63 million for the next quarter.
MENT closed Thursday's regular trading at $7.92, up 0.14 or 1.80%, on a volume of 953K shares on the Nasdaq.
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