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Cadence Design Systems’ Stock Falls 9% On Weak Guidance

Cadence Design Systems’ (CDNS) stock is down 9% after the provider of microchip design software issued weak guidance for the current first quarter of 2024.

Despite a disappointing outlook, Cadence Design managed to beat Wall Street expectations for the fourth and final quarter of 2023.

The company reported earnings per share (EPS) of $1.38 U.S., above the $1.34 U.S. that was forecast among analysts.

Revenue in Q4 2023 came in at $1.069 billion U.S., which was slightly ahead of consensus expectations of $1.06 billion U.S.

In terms of forward guidance, Cadence Design Systems forecast revenue of $990 million U.S. to $1.01 billion U.S., and a profit of $1.10 U.S. to $1.14 U.S. per share for the current first quarter.

That outlook fell short of Wall Street consensus estimates of $1.09 billion U.S. in revenue and profits of $1.37 U.S. a share.

Management blamed the weak guidance on tough comparisons in its hardware business, saying they had an exceptionally strong first quarter a year ago due to a hardware backlog.

However, for the entire year, Cadence Design forecasts revenue of $4.55 billion U.S. to $4.61 billion U.S., and profits of $5.87 U.S. to $5.97 U.S. per share.

The full-year outlook is above analysts’ consensus forecast of $4.57 billion U.S. in sales and a profit of $5.87 U.S. per share.

Before today, Cadence Design Systems’ stock was up 65% over the last 12 months and trading at $306.58 U.S. per share.