Synopsys Inc. shares dropped Thursday after maker of chip testing and development software reported lower quarterly profit and sales as well as higher expenses.
The company also gave an outlook below Wall Street expectations.
The stock slid $1.23, or 5.5 percent, to $21.29 in afternoon trading. The stock has ranged from $17.22 to $23.74 over the past year.
For fiscal 2010, Synopsys predicted a profit of $1.01 to $1.20 per share, or $1.52 to $1.62 per share when excluding items, and revenue of $1.33 billion to $1.35 billion. Analysts polled by Thomson Reuters projected adjusted earnings of $1.68 per share on $1.37 billion in revenue.
Nevertheless, Deutsche Bank's Tim Fox kept a "Buy" rating on Synopsys.
"On a positive front," Fox said, "bookings are expected to be up in (fiscal 2010) and the company appears ready to begin deploying its cash for acquisitions." Fox said that will be essential for Synopsys to expand outside its core business of electronic design automation, where it has less room to grow.