Cadence revelation sees shares tumble

Cadence revelation sees shares tumble
Richard Ball Shares in Cadence Design Systems have dropped 40 per cent after the company surprised Wall Street by announcing that growth in 1999 will be much lower than expected. “Jack Harding said he expected revenues and earning during the course of 1999 to be flat,” said a Cadence spokesperson. Analysts and stockbrokers had been expecting growth of greater than 20 per cent. As recently as January, Cadence CEO Jack Harding said the company was “well positioned for growth in 1999”. Following the announcement, several broker firms downgraded the stock. Shares fell to $12.38 on the New York Stock Exchange from a previous closing price of $20.81. Harding blamed the change in fortunes on a soft Asia-Pacific market and a sluggish semiconductor industry. What surprised most people was his claim that the industry is slow to move to 0.18?m, the design tools which are a large part of Cadence’s product revenue. l Synopsys has reported revenue for the second quarter of $190m, compared with the same period last year of $157m, an increase of 21 per cent. Net income for the second quarter was $27m, compared with net income of $25m for the second quarter in 1998.


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