Mentor Graphics Corp., which makes software and other products for engineers of chips and other products, said Friday it posted a $28.2 million first-quarter profit, reversing a loss in the same quarter last year on strong demand for new products and cost controls.
The company also boosted its full-year profit prediction. However, investors weren't impressed, and Mentor shares tumbled more than 9 percent in morning trading.
For the quarter ended April 30, the Wilsonville, Ore.-based company's profit amounted to 25 cents per share and compared with a loss of $2.4 million, or 2 cents per share, in the year-ago period.
Revenue rose 7.8 percent to $247.9 million from $230 million, as system and software revenue increased 7 percent to $149.4 million and service and support revenue increased 9 percent to $98.6 million.
The profit beat Wall Street predictions by a penny. Analysts, on average, expected a profit of 24 cents per share on $254.9 million in revenue, according to a FactSet poll.
Mentor said the release of a new platform during the quarter attracted significant customer interest, while it also saw strong demand for its Calibre family of products.
For the current quarter, Mentor said it expects to post an adjusted profit of 17 cents per share on about $240 million in revenue. Analysts polled by FactSet expect a profit of 16 cents per share on $240.4 million in revenue.
The company also raised its full-year adjusted profit prediction by 5 cents to $1.37 per share and backed its previous sales prediction of about $1.1 billion.
Analysts polled by FactSet, who usually exclude one-time gains and losses, expect a profit of $1.29 per share on $1.1 billion in sales for the year.
Mentor shares tumbled $1.38, or 9.1 percent, to $13.83 in heavy morning trading, after falling as low as $13.64 earlier in the day. Over the past 52 weeks, the company's shares have traded between $8.50 and $15.76.