Synopsys, a software company that designs chips, beat the analyst's estimates in its second fiscal quarter on Wednesday and increased its outlook for the remainder of the year. SNPS shares rose after the news.
Mountain View, Calif. based company earned adjusted $2.54 per share on sales of $1.3 billion for the quarter ending April 30. FactSet polled analysts who expected Synopsys to earn $2.48 per share on $1.38 billion in sales. Synopsys' earnings and sales increased by 2% each year.
Synopsys forecast adjusted earnings of $2.73 per share for the current quarter that ends July 31 on sales of $1.4 billion. This is based on its midpoint. Wall Street expected earnings of $2.70 per share on $1.48 billion sales in the third fiscal quarter.
Synopsys' midpoint forecast predicted that adjusted earnings for the full year ended Oct. 31 would be $10.81 per share, on sales of $5.81bn. Analysts expected earnings of $10.58 per share and sales of $5.79billion in fiscal 2023.
SNPS Stock is on Two IBD lists
SNPS rose by 1.7% in after-hours stock trading today to 383.62. During Wednesday's regular session, SNPS closed at 377.08 after gaining 0.5%.
Shelagh Glasser, Chief Financial Officer of Investor's Business Daily, said: "We have a very resilient business model which is linked to the R&D plans and long-term goals of our customers." She said that the company's profit margins are also improving.
Synopsys has raised its guidance for the full year to revenue growth between 14-15%, and adjusted earnings per share growth of 22-22%.
According to IBD Stock Checkup, SNPS is ranked fourth among 12 stocks in the Computer Software-Design Industry Group. IBD's Composite Rating for Synopsys is 96 out 99.
IBD Composite Rating is a combination of fundamental and technical metrics that helps investors assess a stock. The Composite Rating should be 90 or higher for the best growth stocks.
Also, SNPS is included in the IBD Portfolio of Long-Term Leaders. Synopsys also appears on the list of stocks.