Synopsys Inc (SNPS) has reported a 44.23 percent jump in profit for the quarter ended Jan. 31, 2017. The company has earned $86.59 million, or $0.56 a share in the quarter, compared with $60.04 million, or $0.39 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $145.08 million, or $0.94 a share compared with $105.93 million or $0.68 a share, a year ago.
Revenue during the quarter grew 14.81 percent to $652.79 million from $568.60 million in the previous year period. Gross margin for the quarter contracted 109 basis points over the previous year period to 76.14 percent. Total expenses were 85.16 percent of quarterly revenues, down from 87.49 percent for the same period last year. This has led to an improvement of 233 basis points in operating margin to 14.84 percent.
Operating income for the quarter was $96.87 million, compared with $71.11 million in the previous year period.
“The first fiscal quarter was an excellent beginning to the year, as we substantially exceeded expectations. Business was strong across the board, amplified by the timing of hardware and IP deliverables. Our first quarter results and confidence in the year lead us to increase annual revenue, earnings per share and operating cash flow targets. In addition, we continued to return capital to shareholders with a $100 million share repurchase,” said Aart de Geus, chairman and co-chief executive officer of Synopsys. “Meanwhile, semiconductor and systems companies, as well as software developers across industries, continue to invest in many of the areas that enable the era of ‘smart everything,’ and our Silicon to Software vision and portfolio set us apart as a highly valued partner in these efforts.”
For the first-quarter, Synopsys expects revenue to be in the range of $665 million to $680 million. Synopsys expects revenue to be in the range of $2,580 million to $2,610 million for financial year 2017. The company projects diluted earnings per share to be in the range of $0.51 to $0.59 for the first-quarter. For financial year 2017, the company projects diluted earnings per share to be in the range of $2.01 to $2.12. On an adjusted basis, the company projects diluted earnings per share to be in the range of $0.85 to $0.88 for the first-quarter. For financial year 2017, the company projects diluted earnings per share to be in the range of $3.21 to $3.26 on adjusted basis.
Operating cash flow turns positive
Synopsys Inc has generated cash of $46.88 million from operating activities during the quarter as against cash outgo of $35.17 million in the last year period.
The company has spent $202.79 million cash to meet investing activities during the quarter as against cash outgo of $29.48 million in the last year period.
Cash flow from financing activities was $15.88 million for the quarter as against cash outgo of $182.26 million in the last year period.
Cash and cash equivalents stood at $827.71 million as on Jan. 31, 2017, up 41.98 percent or $244.72 million from $582.99 million on Jan. 31, 2016.
Working capital turns positive
Working capital of Synopsys Inc has turned positive to $27.49 million on Jan. 31, 2017 from negative $232.75 million on Jan. 31, 2016. Current ratio was at 1.02 as on Jan. 31, 2017, up from 0.84 on Jan. 31, 2016.
Days sales outstanding went down to 58 days for the quarter compared with 68 days for the same period last year.
Debt increases substantially
Synopsys Inc has witnessed an increase in total debt over the last one year. It stood at $319.54 million as on Jan. 31, 2017, up 40.46 percent or $92.04 million from $227.50 million on Jan. 31, 2016. Long-term debt stood at $142.50 million as on Jan. 31, 2017. Total debt was 6.07 percent of total assets as on Jan. 31, 2017, compared with 4.79 percent on Jan. 31, 2016. Debt to equity ratio was at 0.10 as on Jan. 31, 2017, up from 0.08 as on Jan. 31, 2016.
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