Cadence Design Systems (CDNS) late Monday beat Wall Street’s targets for the third quarter. But CDNS stock fell in extended trading on a disappointing outlook for the current quarter.
The electronic design automation software firm earned an adjusted $1.93 a share on sales of $1.34 billion in the September quarter. Analysts polled by FactSet had expected earnings of $1.79 a share on sales of $1.32 billion. On a year-over-year basis, Cadence earnings rose 18% while sales increased 10%.
However, the company’s full-year guidance translated into a miss for fourth-quarter forecasts. For the current quarter, Wall Street had been modeling adjusted earnings of $1.92 a share on sales of $1.41 billion. But Cadence guided to Q4 earnings of $1.78 a share on sales of $1.39 billion. In the fourth quarter last year, Cadence earned $1.88 a share on sales of $1.36 billion.
For the full year, Cadence forecast adjusted earnings of $7.05 a share on sales of $5.28 billion, based on the midpoint of its outlook. Analysts had been expecting earnings of $6.93 a share on sales of $5.25 billion.
Cadence ended the third quarter with a record backlog of $7 billion.
“With deepening strategic relationships across the AI ecosystem, Cadence is uniquely positioned to be the trusted partner to deliver AI-centric transformational solutions,” Chief Executive Anirudh Devgan said in a news release.
In after-hours trading on the stock market today, CDNS stock sank nearly 2% to 345. During the regular session, CDNS stock advanced 1.8% to close at 351.40.
CDNS stock is on two IBD lists: Long-Term Leaders and Tech Leaders.
Follow Patrick Seitz on X at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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