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Shares of Cadence Design Systems (NASDAQ: CDNS) surged on Thursday following the company's fourth-quarter report. Cadence beat analyst estimates for earnings and provided first-quarter guidance calling for continued growth. At 11 a.m. EST, the stock was up about 10.5%.
Cadence reported fourth-quarter revenue of $469 million, up 6.3% year over year and in line with the average analyst estimate. CEO Lip-Bu Tan pointed to 9% growth in the digital IC and signoff business, driven by strong customer adoption, as one factor behind the company's performance.
Non-GAAP earnings per share came in at $0.34, up from $0.31 in the prior-year period and $0.01 better than analysts were expecting. GAAP EPS slumped 46% to $0.14, largely due to restructuring charges. Share buybacks lowered the share count and provided a boost to per-share numbers, with Cadence spending $240 million on buybacks during the fourth quarter.
Tan pointed to the success of its Palladium Z1 enterprise emulation system, and talked about the company's expansion into new markets:
Cadence expects to produce first-quarter revenue in the range of $470 million to $480 million, up from $448 million during the prior-year period. GAAP EPS is expected between $0.19 and $0.21, while non-GAAP EPS is expected between $0.30 and $0.32.
For 2017, Cadence expects revenue between $1.90 billion and $1.95 billion, up from $1.82 billion during 2016. GAAP EPS should be between $0.89 and $0.99, with non-GAAP EPS between $1.32 and $1.42. Cadence authorized a $525 million share repurchase program on Jan. 30, which will help the company hit these targets.
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