WILSONVILLE, OR -- Mentor Graphics today reported second quarter net income fell 42% year-over-year to $13.8 million.

The PCB and IC software design company said revenues for the period ended July 31 rose 2.8% to $260.2 million.

Demand for design tools for automotive electronics boosted revenue in the period. Automotive bookings set a quarterly record and was up three times over last year. Year-to-date bookings for auto tools have matched those of fiscal 2014.

"System design strength, particularly with automotive customers, drove the second quarter with earnings solidly beating guidance, said chairman and CEO Wally Rhines. "The automotive industry is in transition from mechanical to electronic differentiation and the rate of change is accelerating. Electronic content in vehicles is about 40% of the cost of a car. This is yielding considerable opportunities for Mentor."

During the quarter the company announced acquisitions of XS Embedded, a developer of automotive software and hardware, and Nimbic, a provider of 3D electromagnetic simulation technology for IC packaging design.

Mentor also launched tools for testing power electronic components reliability, automated verification, and the Xpedition Data Management suite for PCB systems design.

Mentor guided for third-quarter revenues of $275 million and full year revenues of $1.237 billion.