WILSONVILLE, OR -- Mentor Graphics' fiscal first-quarter net loss widened to $10.5 million from $3 million a year ago as the EDA software company aborbed the costs of a major employee restructuring.

For the period ended April 30, the company reported revenues of $272.1 million, up 7.8% from last year. Service and support was the big gainer, up 11.8%, while software sales rose 5.2% during the quarter.

The operating loss was $7.7 million, down from an operating profit of $1.6 million a year ago. Mentor took $37 million in charges for the period as it reduced its worldwide headcount by 4%.

“The first quarter was strong for Mentor Graphics, substantially exceeding financial guidance,” said Wally Rhines, chairman and CEO. “In addition to more than 50% bookings growth in three of our four product categories, our automotive business was very strong, driven by a major win with a leading automotive OEM. We also initiated a strategic and geographic realignment of resources. First quarter results provide a solid start to the year.”

During the quarter the company acquired the business assets of Tanner EDA, providing tools for design, layout and verification of internet of things (IoT) devices plus analog/mixed-signal and MEMS integrated circuits, and rolled out Xpedition Package Integrator flow for IC, package and PCB co-design and optimization; and three new Pads products for printed circuit board design.

"First-quarter revenue was 5% greater than guidance, while continued attention to expenses drove non-GAAP earnings per share to exceed guidance by 55%,” said president Greg Hinckley. “Automotive bookings, particularly services, were very strong in the quarter, accounting for over 15% of total bookings. Cash flow from operations is off to a strong start with $46 million generated in the quarter.”

Mentor guided for fiscal second quarter revenue of $250 million and affirmed previous company revenue guidance of about $1.282 billion for the year.

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