August 22, 2018 / 8:14 PM / 8 months ago

Synopsys' beat, strong forecast put shares on pace for record high

(Reuters) - Synopsys Inc reported better-than-expected quarterly results and forecast fourth-quarter above Wall Street estimates on Wednesday, as the maker of chip design software benefits from rising demand from semiconductor clients.

FILE PHOTO: A man walks through the Synopsys booth during the Black Hat information security conference in Las Vegas, Nevada, U.S., July 26, 2017. REUTERS/Steve Marcus/File Photo

The company’s shares rose nearly 5 percent to $99.40 in after-market trading, on track to open at a record high on Thursday.

Synopsys, whose clients include Intel Corp and IBM Corp, receives more than half of its revenue from supplying electronic design automation (EDA) software to chipmakers, which they use to design and test chips.

The company is also set to benefit from emerging technology areas such as artificial intelligence, autonomous driving and the Internet of Things (IoT), analysts have said.

“The age of digital intelligence is driving significant investments by traditional and new semiconductor and systems companies, as well as software developers across many industries,” co-CEO Aart de Geus said in a statement.

Synopsys forecast fourth-quarter revenue between $774 million and $804 million, while analysts on average were expecting $764.05 million, according to Thomson Reuters I/B/E/S.

The company said it expected fourth-quarter adjusted profit between a range of 76 cents per share to 80 cents per share, above the average estimate of 70 cents.

Total revenue rose about 12 percent to $779.7 million in the in the third quarter ended July 31, topping analysts’ estimate of $773.6 million.

However, net income fell 32 percent to $79.4 million as the company’s total operating expenses rose 23 percent.

Excluding items, the company reported 95 cents per share, above analysts’ average estimate of 92 cents.

Reporting by Akanksha Rana in Bengaluru; Editing by Sriraj Kalluvila

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