Synopsys raises outlook, splits CEO role

Acquisition costs hurt Synopsys 2Q profit, but raises outlook for year; names COO a co-CEO

Associated Press

MOUNTAIN VIEW, Calif. (AP) -- Synopsys Inc. on Wednesday said its top two leaders will now share the seat of chief executive officer. The company also raised its outlook for the year, citing results in its most latest quarter and a recent acquisition.

The current CEO and Chairman, Aart de Gues, will become co-CEO along with the current COO and President, Chi-Foon Chan. The company said it made the move to recognize Chan's contributions in leading Synopsys for more than a decade. The two executives' responsibilities will remain the same.

The company, which makes software that aids in chip development, said that it earned $21 million, or 14 cents per share, for the three months ended April 30, its fiscal second quarter. That's down from $81.1 million, or 53 cents per share, a year ago.

After adjusting for costs tied to its purchase of Magma Design Automation and other unusual items, it earned 53 cents per share versus 45 cents per share last year. The acquisition closed in February.

Analysts polled by FactSet were expecting the company to earn 55 cents per share.

The company, which is based in Mountain View, Calif., said revenue grew 10 percent to $432.6 million from $393.7 million. Analysts expected $417.4 million.

The company said it is raising its full-year guidance on the strength of its core business and the benefit from Magma. It now expects adjusted earnings of $2.03 to $2.07 per share on revenue of $1.74 to $1.76 billion for the year. That's up from its prior forecast in February of adjusted earnings of $1.97 to $2.03 per share on revenue of $1.66 to $1.68 billion.

Analysts are expecting Synopsis to earn $2.03 per share on revenue of $1.67 billion for the year.

Synopsis also forecast adjusted earnings of 49 to 51 cents per share on revenue of $440 to $448 million for its current quarter ending in July. Analysts are expecting the company to earn 46 cents per share on revenue of $413.1 million.

Synopsis shares rose 56 cents, or 2 percent, to $28.76 in after-hours trading on the news. Its shares rose 16 cents to close regular trading at $28.20.