) reported earnings per share (EPS) of 55 cents in the first
quarter of 2013, well ahead of the Zacks Consensus Estimate of 28
Revenue in the first quarter stood at $475.1 million, up 11.7%
from $425.5 million in the year-ago period. The company witnessed
good business volume, technology progress, and customer
engagements during the first quarter. Moreover, Semiconductor
companies are adopting new technology at regular intervals.
(including time-based and upfront) were $385.9 million, up 8.4%
from $355.9 million in the year-ago quarter. Upfront revenue was
6.5% of the total revenue and well within the company's targeted
range of less than 10.0%.
Maintenance and service revenues
were $58.4 million, up 42.1% from $41.1 million in the prior-year
Gross profit was $364.0 million (76.6% of the total revenue),
up 8.5% from $335.6 million (78.9% of revenues) in the year-ago
quarter. Gross margin declined, as growth in cost exceeded the
growth in revenue.
Total operating expense in the quarter was $303.1 million, up
14.1% from $265.6 million in the year-ago quarter. Research &
Development (R&D), Sales & Marketing (S&M), General
& Administrative (G&A) expenses also increased
considerably in the quarter. Operating margin for the quarter was
12.8% versus 16.4% in the year-ago quarter.
GAAP net income in the reported quarter was $69.9 million or
45 cents per share, up from $56.7 million or 39 cents per share
in the year-ago quarter. Excluding special items like
amortization, acquisition-related costs, facility restructuring
charge, facility restructuring charges, non-GAAP net income in
the quarter was 55 cents per share, below 61 cents in the
As of Jan 31, 2013, cash and cash equivalents were $500.4
million compared with $700.4 million at the end of the previous
quarter. Accounts receivable was $270.2 million, down from $292.7
million in the year-ago quarter.
For the second quarter of fiscal 2013, the company expects
revenue in the range of $490-$500 million. The company expects
GAAP expenses in the range of $409-$425 million. While GAAP
earnings per share are expected in the range of 38-44 cents,
Non-GAAP earnings per share are expected in the range of 63-65
For the full year 2013, the company expects revenue in the
range of $1.955-$1.975 billion, while GAAP earnings per share are
expected in the range of $1.44-$1.56 and non-GAAP earnings per
share are projected to be $2.35-$2.40.
Synopsys delivered modest first-quarter 2013 results, with a
substantial jump in revenue but operating margin declining
compared with the year-ago quarter.
Some of the unique intellectual properties provided by
Synopsys with the help of its financial strength, technology
leadership and global support will likely drive the innovation
process. Synopsys is optimistic about enhancing the innovation
process based on the increasing popularity of the automation and
The company still has a good cash reserve that is necessary
for funding further acquisitions. Moreover, Synopsys' product
innovation strategy, the popularity of its time-based license
model and its tie up with
Advanced Micro Devices Inc.
) encourage us.
However, stiff competition from
), all of which carry a Zacks Rank #1 (Strong Buy), a challenging
technology spending environment and uncertainty regarding proper
time to realize acquisition synergies keep us on the
Currently, Synopsys has a Zacks Rank #4 (Sell).
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