Synopsys fiscal 4th-qtr profit falls, 1st-qtr and fiscal 2010 outlook misses analyst views

Synopsys fiscal 4Q profit drops, shares fall

MOUNTAIN VIEW, Calif. — Synopsys Inc. said Wednesday that its fiscal fourth-quarter profit sank as revenue declined and operating expenses rose. The maker of chip testing and development software also gave first-quarter and fiscal 2010 guidance that was lower than analysts expected.

Synopsys shares fell $1.87, or 8.3 percent, to $20.65 in after-hours trading. The shares had finished regular trading down 3 cents at $22.52.

For the quarter, Synopsys earned $19.5 million, or 13 cents per share, compared with $46.4 million, or 32 cents per share, in the year-ago quarter. When excluding one-time items, the company earned 33 cents per share — a penny higher than what analysts polled by Thomson Reuters expected.

Revenue fell 4 percent to $338.3 million from $352.8 million last year, coming in just shy of analysts’ $339.4 million forecast.

Time-based license revenue fell 2 percent to $285.1 million, while upfront license revenue dropped 38 percent to $16.2 million. Maintenance and service revenue dipped 2 percent to $37 million.

The company’s operating expenses rose to $240.2 million from $220.6 million, due mainly to increased research and development expenses.

For fiscal 2009, Synopsys earned $167.7 million, or 1.15 per share, up from $190 million, or $1.29 per share, in 2008. Revenue totaled $1.36 billion, up from $1.34 billion last year.

Looking ahead, the company predicted first-quarter earnings of 23 cents to 28 cents per share, or 38 cents to 40 cents when excluding items, and revenue of $325 million to $333 million.

Analysts are looking for higher adjusted earnings of 41 cents per share on $332.8 million in revenue.

For the fiscal 2010 year, Synopsys predicted a profit of $1.01 to $1.20 per share, or $1.52 to $1.62 per share when excluding items, and revenue of $1.33 billion to $1.35 billion. Analysts expect much greater adjusted earnings of $1.68 per share on $1.37 billion in revenue.