The semiconductor chip maker, Cadence Design Systems Inc. (CDNS) posted its Q1 2022 earnings on April 25, 2022, after the market close. Topping target amid robust chip design activity, the company’s stock remained bullish in the after-hours with a gain of 5.56%. Thus, CDNS was trading at a price of $159.50 per share after it increase by $8.40 in the session. This uptick came after an increase of 2.05% during regular trading which had the stock priced at $151.10 at the close.
CDNS’ Q1 2022 Earnings Analysis
For the March quarter, the chip maker reported adjusted earnings of $1.17 a share on sales of $902 million. The figures not only beat the company’s own guidance but also consensus estimates for the quarter. Analysts were expecting earnings of $1.02 per share on sales of $857 million while the company had projected earnings of $1.02 a share on sales of $860 million at the midpoint. Hence, the quarterly earnings marked a rise of 41% YOY while sales grew by 22.5% against the respective guidance of YOY increase of 23% and 17%.
Comparatively, the year-ago earnings were $0.83 per share while sales stood at $736.03 million in 2021.
For the ongoing quarter, CDNS is expecting earnings of $0.97 per share on revenue of $835 million at the midpoint. Analysts’ expectations place earnings at $0.92 per share while revenue is expected to be $824 million in the second quarter of 2022.
Furthermore, the company building on strong demand for its technology in the year also revised and improved its outlook for the full year. It now expects to post earnings of $3.93 per share on revenue of $3.42 billion for the full year. Initially, the company was expecting earnings of $3.75 a share on revenue of #3.35 billion. The full-year outlook also surpassed analysts’ expectations of earnings of $3.76 per share on revenue of $3.36 billion.
How Does the Market Look?
Supply chain disruptions have been running amok in the semiconductor chip marker. The world recently witnessed a global shortage of semiconductor chips that are widely used in a number of industries ranging from computing to 5G communications, to automotive, healthcare, aerospace, industrial, etc. Demand has been soaring high for the chips in 2021 and has continued to rally on a healthy momentum in 2022 as well.
High demand, beat outlook, solid execution has CDNS stock rallying as it looks forward to much growth in 2022.