Cadence Design Systems Stock Slides On Weak Q2 GuidanceCadence Design Systems ( NASDAQ:CDNS ), a San Jose-based electronic design automation software manufacturer, has released its first-quarter financial results. The company reported adjusted earnings of $1.17 per share on sales of $1.01 billion, beating FactSet's estimated earnings of $1.13 per share on sales of $1 billion. However, compared to the same period last year, the company's earnings fell by 9%, while sales decreased by 1%. This marks the company's first quarterly sales decline in more than eight years and the first decline in earnings on a year-over-year basis in nine quarters.
Despite the positive first-quarter results, Cadence's ( NASDAQ:CDNS ) second-quarter guidance is below expectations. The company is forecasting adjusted earnings of $1.22 per share on sales of $1.04 billion, below analysts' predictions of $1.43 per share on sales of $1.11 billion. In the year-ago period, the company earned adjusted earnings of $1.22 per share on sales of $977 million.
Cadence's CFO, John Wall, stated that the company had achieved a record Q1 backlog of approximately $6 billion, and the company had made two major acquisitions in the first quarter. On January 8th, Cadence ( NASDAQ:CDNS ) announced its acquisition of Invecas, a provider of design engineering, embedded software and system-level solutions, while on March 5th, the company announced its plan to purchase BETA CAE Systems International, a system analysis platform provider of multi-domain, engineering simulation solutions, for $1.24 billion.
In response to Cadence's Q2 guidance, NASDAQ:CDNS stock plummeted by 9.3% to $258.60 in after-hours trading but shortly surged by 1.7% in Pre-market trading on Tuesday. The company's full-year outlook remains positive, with adjusted earnings of $5.93 per share on sales of $4.59 billion, matching FactSet's estimates. Last year, Cadence ( NASDAQ:CDNS ) earned adjusted earnings of $5.15 per share on sales of $4.09 billion.
The stock has a Relative Strength Index (RSI) of 35.30 siting weak momentum from ( NASDAQ:CDNS ) stock
