Mentor Graphic’s Q4 Revenue Misses Street’s Estimates, Outlook Also Weak (MENT)

Shares of Mentor Graphics Corp. (NASDAQ: MENT) slumped on Friday after the  supplier of electronic design automation (EDA) tools announced fiscal fourth-quarter results which showed revenue falling short of analysts’ consensus estimate and provided weaker than expected guidance both  on the current quarter and fiscal 2014.

The Wilsonville, Oregon-based Company said that revenue for fiscal fourth quarter ended January 31, came at $331.2 million down from $343.2 million, in the year earlier quarter.

However, earnings on adjusted or non-GAAP basis exceeded Street’s forecast. Excluding onetime items earnings came at 58 cents a share while Street’s forecast was for 55 cents a share.

While revenue from system and software segment rose to $226.27 million in the fourth quarter from $220.05 million, in the year earlier quarter, revenue at services and support segment increased to $104.97 million from $100.31 million.

Operating margins during the quarter widened by 100 basis points to 21.5% due lower operating expenses. However, gross margins shrunk by 40 basis points.

For the fiscal 2013, the Company reported net income of $138.74 million or $1.17 a share, compared to $83.87 million or 74 cents a share, in the year earlier quarter.

Stripping out onetime items, adjusted earnings came at $1.42 a share on revenue of $161.45 million, compared to earnings of $1.13 on revenue of $127.21 million.

Total revenue in the fiscal 2013 rose 7.3% to $1.09 billion from $1.01 billion, in the last fiscal.

Analysts’ consensus estimate was for earnings of $1.39 a share on revenue of $1.10 billion, for the fiscal 2013.

For the current quarter, the Company expects earnings of 5 cents a share on revenue of $225 million, falling short of analysts’ consensus for earnings of 20 cents a share on revenue of $241.4 million.

Looking ahead at the fiscal 2014, Mentor Graphics expect earnings of $1.53 a share on revenue of $1.155 billion, against analysts’ consensus forecast for earnings of $1.59 a share on revenue of $1.17 billion.

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Post Written By: Ed Liston Ed Liston is a senior contributing editor at TheStockMarketWatch.com. An active market watcher and investor, Ed guides an independent team of experienced analysts and writes for multiple stock trader publications. He is widely quoted in various financial publications on the Internet. When Ed is not writing about stocks, investing in stocks, talking about stocks, or otherwise doing something stock related, he likes to go sailing and fishing in his yacht.