Synopsys Q3 Profit Declines - Update

(RTTNews) - Synopsys Inc. (SNPS) Wednesday reported a decline in third-quarter profit despite higher revenues as the chip design-software provider's expenses escalated, while the prior-year period had a tax benefit. Nonetheless, both earnings and revenues for the quarter topped Wall Street estimates.

Moving ahead, Synopsys detailed a weak outlook for the fourth quarter. The company lifted its full-year earnings outlook and tightened its revenue expectations.

Mountain View, California-based Synopsys' third-quarter profit dropped to $52.3 million or $0.33 per share from $75.7 million or $0.50 per share last year.

Last year, the company recorded a income tax benefit of $14.6 million. Adjusted income, which excludes special gains and losses, was $86.5 million or $0.55 per share, compared to $82.3 million or $0.55 per share last year. On average, six analysts polled by Thomson Reuters estimated earnings of $0.54 per share. Analysts' estimates typically exclude special items.

Synopsys, which makes design software for the development and testing of chips, said revenues for the quarter grew 8.8 percent to $482.9 million from $443.7 million last year. Analysts had consensus revenue estimate of $481.9 million for the quarter.

Looking forward to the fourth quarter, the company expects earnings of $0.29 to $0.35 per share, adjusted earnings of $0.54 to $0.56 per share and revenues of $500 million to $510 million. Analysts currently estimate earnings of $0.56 per share on revenues of $513.99 million.

For the full year 2013, the company now expects earnings of $1.51to $1.57 per share, adjusted earnings of $2.42 to $2.44 per share and revenues of $1.957 billion to $1.967 billion.

Analysts currently estimate earnings of $2.42 per share and revenues of $1.97 billion for the year.

Previously, the company expected net earnings of $1.48 to $1.56 per share, adjusted earnings of $2.37 to $2.42 per share and revenues of $1.955 billion to $1.975 billion.

SNPS closed Wednesday at $36.56, down $0.45 or 1.22%, on the Nasdaq. The stock further dropped $0.08 or 0.22% in after hours trade.