For much of the year, shares of Mentor Graphics (NASDAQ:MENT) have gone mostly downhill, losing nearly 40%. But late last week, the stock shot up nearly 18% after the company reported its fiscal second-quarter numbers.

Mentor Graphics develops electronic design automation (EDA) software, which is used to develop circuit boards and other peripherals. Its customers include IBM (NYSE:IBM), Sun Microsystems (NASDAQ:SUNW), and Matsushita Electric Industrial (NYSE:MC).

Fiscal Q2 revenues came in at $205.7 million, up 15% year over year. On the conference call, management described strength across all product lines, even in the automotive sector, where Ford (NYSE:F) suppliers bought more of Mentor's goods.

Net income was $2.4 million, or $0.03 per share, compared to a loss of $448,000 or $0.01 per share in the year-ago period. Keep in mind that Mentor took a $4.1 million charge for in-process R&D because of its $90 million acquisition of Sierra Design Automation in early June. The deal seems like a smart move; Sierra's technologies address the complexities of next-generation designs, which involve ultra-small, high-performance chips.

After staying flat for a few years, the EDA market made a comeback last year, but that strength might not be sustainable. Mentor's management seems to foresee a rosy environment, though. The company has provided a healthy full-year revenue estimate of $860 million, and management predicts earnings of $0.55 per share.

On a quarter-to-quarter basis, Mentor has shown lots of volatility over the years, giving investors whiplash. Things may be different this time -- but I still think there's risk here. The stock may be good for quick-trigger traders, but not so good for the portfolios of long-term Foolish investors.

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Fool contributor Tom Taulli, author of The Complete M&A Handbook, does not own shares mentioned in this article. He is currently ranked 2,509 out of more than 60,000 total participants in CAPS.