Cadence Design Systems (CDNS) shares experienced a significant decline in extended trading on Monday due to the company’s underwhelming outlook for its fiscal second quarter. Cadence anticipates sales to be between $1.03B and $1.05B, below analysts’ expectations of $1.11B. Adjusted earnings are forecast to fall within a range of $1.20 to $1.24 per share, well below the $1.43 per share analysts were expecting.
Despite the second-quarter shortfall, Cadence expressed optimism for 2024, raising its sales outlook to between $4.56B and $4.62B, up from the previous estimate of $4.55B to $4.61B. Analysts expect $4.59B in sales for the full year. The company also boosted its full-year adjusted earnings forecast, now expecting to earn between $5.88 and $5.98 per share, up from a prior range of $5.87 to $5.97 per share. Analysts anticipate full-year adjusted earnings of $5.94 per share.
Cadence, based in San Jose, California, provides design and packaging software for chips. Companies like Nvidia (NVDA), Arm (ARM), and Intel (INTC) are among its clients. In the first quarter, Cadence reported adjusted earnings of $1.17 per share, while revenue slipped 1% year-over-year to $1.01B. Analysts had predicted adjusted earnings of $1.13 per share on revenue of $1.02B. Cadence will hold a conference call at 5 p.m. EST to discuss the results.
