Shares of Cadence Design Systems (NASDAQ:CDNS) plummeted by as much as 10% Tuesday morning after the company delivered its first-quarter report. The results topped expectations, but management's sales outlook for the second quarter was lacking. As of 11:54 a.m. EST, the stock was still down by 8.1%.
Revenue in the first quarter was $736 million, topping the analysts' consensus estimate of $717.8 million. Adjusted net income came in at $231 million, or $0.83 per share. Analysts were modeling for $0.74 per share in adjusted profits.
"Cadence delivered excellent financial results for the first quarter driven by strong execution and ongoing momentum in our core business and accelerating growth in our systems businesses," CEO Lip-Bu Tan said in a statement. "Innovation is foundational to our Intelligent System Design strategy and since the start of 2021 we introduced several exciting new products, including the Palladium Z2 emulation platform, Protium X2 prototyping platform and next-generation Sigrity X for systems analysis."
The semiconductor company is forecasting second-quarter revenue in the range of $705 million to $725 million. The midpoint of that range falls short of the $721.6 million in sales that Wall Street was looking for. Its outlook for earnings per share of $0.74 to $0.78 was mostly in line with analysts' current expectations for $0.75 per share in adjusted profits.
For the full year, Cadence expects revenue to be in the range of $2.88 billion to $2.93 billion. The consensus estimate was for revenue of $3.01 billion.