Cadence Design Systems Forecasts Annual Revenue, Profit Below Estimates amid Soft Demand
Cadence Design Systems has projected its annual revenue and profit below analysts' estimates, indicating a slowdown in demand for its chip design software.
Key Points:
* Revenue forecast: $5.14-$5.22 billion (analyst estimate: $5.25 billion)
* Profit forecast (excluding items): $6.65-$6.75 per share (analyst estimate: $6.83 per share)
* Q4 revenue: $1.36 billion (26.8% YoY increase)
* Q4 earnings per share (excluding items): $1.88 (analyst estimate: $1.82)
Industry Headwinds and Competitive Landscape:
* Analysts cite subdued demand for Cadence's design and analysis products due to industry downturn in automotive end market.
* China's business contribution is under threat due to U.S. semiconductor restrictions.
* Rival Synopsys' proposed acquisition of Ansys poses a competitive challenge in the concentrated industry.
Financial Impact:
* Shares of Cadence Design Systems declined 5% in extended trading after the forecast announcement.