CDNS shares rise after fourth quarter earnings

Electronic design software manufacturer Cadence Design Systems (CDNS) late on Monday beat Wall Street targets for the fourth quarter and rose for the current quarter and full year. Shares of CDNS rose in extended trading.


The San Jose, California-based company earned 83 adjusted cents a share on sales of $ 760 million in the December quarter. Analysts had forecast Cadence’s earnings of 74 cents a share on sales of $ 732 million. Year-over-year, Cadence’s profits increased 54% while sales increased 27%.

The report marked the company’s fourth consecutive quarter of accelerated sales and earnings growth.

For the current quarter, Cadence expects to earn an adjusted 74 cents per share, up 23%, on sales of $ 720 million, up 17%. That is based on the midpoint of your orientation. Analysts were forecasting earnings of 71 cents a share on sales of $ 703 million in the first quarter.

CDNS shares rise in after-hours trading

For 2021, Cadence forecasts adjusted earnings of $ 3 per share on sales of $ 2.98 billion, based on the midpoint of its outlook. Wall Street was forecasting adjusted earnings of $ 2.88 per share on sales of $ 2.83 billion. In 2020, Cadence earned adjusted $ 2.80 per share on sales of $ 2.68 billion.

In trading after the close of the stock market today, CDNS shares were up 4.4%, close to 139. During the regular session, CDNS shares fell 4.7% to 133.16 in one day difficult for tech stocks.

“Generational industry drivers continue to drive strong design activity,” Chief Executive Officer Lip-Bu Tan said in a press release. “I am especially excited about the momentum in our systems design and analysis segment as we advance our Intelligent Systems Design strategy with the pending acquisition of Numeca.”

On January 20, Cadence announced an agreement to purchase Numeca, a provider of computational fluid dynamics software, optimization technologies and heat transfer. It did not disclose the financial terms of the acquisition.

Cadence in the stock list IBD 50

On December 18, CDNS shares broke a flat base at a buy point of 127.60, according to IBD MarketSmith charts. A tight three-week pattern in January offered another buying point. CDNS shares hit a record 149.08 on February 16.

Since its breakout, CDNS shares have twice retreated to their 50-day moving average line, a key support level. It ended the regular session on Monday just below its 50-day line, but rose above it in after-hours trading.

CDNS shares rank 34th on the IBD 50 list of top performing growth stocks.

Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software, and semiconductor stocks.


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