Synopsys shares jump on 4Q earnings

NEW YORK - Shares of Synopsys Inc. surged Thursday after the software maker posted better-than-expected fourth-quarter earnings and projected sales and profit will meet Wall Street estimates for the first quarter of 2009.

Mountain View, Calif.-based Synopsys shares rose $1.86, or 12.3 percent, to $16.95 in afternoon trading.

RBC Capital Markets analyst Mahesh Sanganeria reiterated an "Outperform" rating on the stock and lifted his earnings estimate for 2009 as well as his price target.

In a note to investors, Sanganeria said the company's management affirmed his view that the economic turmoil has presented "a 'unique opportunity' to emerge strengthened from the current industry-wide downturn."

He raised his price target to $22 from $21 and said he expects $1.68 per share in earnings for fiscal 2009 on $1.38 billion in revenue, up from a previous estimate of $1.65 on $1.35 billion. Analysts expect $1.67 per share and $1.38 billion in revenue, on average.

The company said Wednesday that earnings rose 13.1 percent to $46.4 million, or 32 cents per share, from $41 million, or 27 cents per share, in the year-ago period. Revenue climbed 12 percent to $352.8 million from $315.2 million.

Excluding one-time items, Synopsys said it earned 43 cents per share. Analysts, who typically exclude one-time charges, were expecting 38 cents on $351.1 million in revenue, according to polling by Thomson Reuters.

Looking forward, the company said it expects adjusted earnings to come in between 40 cents and 42 cents per share for the first fiscal quarter of 2009 on revenue of $332 million to $340 million.

Analysts, on average, are looking for 41 cents on revenue of $336.7 million.

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