Magma Design posts 2Q profit as costs drop sharply

AP News
Posted: Dec 03, 2009 6:05 PM

Shares of chip design software maker Magma Design Automation Inc. soared after-hours Thursday as the company posted a fiscal second-quarter profit, reversing a year-ago loss, as sharply reduced expenses outpaced declining sales.

For the three months ended Nov. 1, the company earned $4.3 million, or 8 cents per share, compared with a loss of $26.3 million, or 60 cents per share, in the year-ago quarter. Excluding a gain of $7.7 million due to an adjustment to reduce reserves for foreign taxes and other items, the company said its profit was $1.7 million, or 3 cents per share, in the latest period.

Per-share results reflect a 35 percent jump in the number of shares outstanding.

Sales slipped 19 percent to $29.7 million, from $36.5 million in the year-ago quarter. However, operating expenses dropped 41 percent to $26.7 million from $45.4 million.

For Magma's fiscal third quarter, which ends Jan. 31, the company expects revenue in the range of $29.5 million to $30 million and a loss per share of 13 to 14 cents. Adjusted earnings are expected to total 2 to 3 cents per share.

Magma shares closed Thursday down 9 cents, or 3.7 percent, at $2.33, but jumped 25 cents, or nearly 11 percent, to $2.58 after the report.