Mentor achieves first $1 billion sales year

SAN FRANCISCO—As expected, EDA vendor Mentor Graphics Corp. reported Tuesday (Feb. 28) that its annual sales eclipsed $1 billion for the first time ever, as the company reported sales and earnings that beat analysts' expectations for its fiscal fourth quarter.

Walden Rhines, Mentor's chairman and CEO, told analysts in a conference call following the quarterly report that Mentor's growth in the fiscal year was driven by customers' adoption of 28- and 20-nm technology, driving growth in verification. He also cited Mentor's success in diversifying its business outside of its core EDA space.

Mentor (Wilsonville, Ore.) reported sales of $320.4 million for the quarter ended Jan. 31, up 28 percent from the previous quarter and up 4 percent from the year-ago quarter. The company reported a net income in accordance with generally accepted accounting principles (GAAP) of $57.8 million, up 140 percent from the previous quarter and up 14 percent compared to the year ago quarter.

On a non-GAAP, excluding charges, Mentor reported a net income of $64.7 million, or 58 cents per share, compared to a non-GAAP net income of $54.2 million, or 45 cents per share, in the year-ago quarter.

Mentor's quarterly results exceeded consensus analysts' expectations, which called for sales of $316.4 million and non-GAAP earnings of 50 cents per share, according to Yahoo Finance.

For the full year, Mentor reported sales of $1.014 billion, up 11 percent from the previous fiscal year. The company reported a GAAP net income for the year of $83.9 million, up 193 percent from the previous year.

Mentor said it expects growth to continue in the current year, the company's fiscal 2013. Mentor expects sales for the current quarter to decline to about $255 million, with GAAP earnings per share of about 19 cents. For fiscal 2013, Mentor said it expects sales to grow to about $1.1 billion, with GAAP earnings per share of about $1.13.

Rhines said growth of Mentor's core EDA business, as well as growth in adjacent areas such as embedded software, automotive and aerospace, coupled with new applications in system design such as thermal analysis "all point to continuing momentum in the future."