Earnings Preview for Cadence Design Systems

Cadence Design Systems CDNS will be releasing its next round of earnings this Monday, April 26. For all of the relevant information, here is your guide for Monday's Q1 earnings announcement.

What Are Earnings, Net Income, And Earnings Per Share?

Earnings and EPS are useful metrics of profitability. Total earnings also known as net income is equal to total revenue minus total expenses. Dividing net income by the total number of shares outstanding yields EPS.

Earnings And Revenue

Analysts covering Cadence Design Systems modeled for quarterly EPS of $0.75 on revenue of $717.79 million. Cadence Design Systems EPS in the same period a year ago totaled $0.6. Sales were $617.96 million.

What Are Analyst Estimates And Earnings Surprises, And Why Do They Matter?

Analysts who cover this company will publish forward-looking estimates of its revenue and EPS each quarter. Averaging together every EPS and revenue prediction that each analyst makes about a company in a quarter yields the "consensus estimates." A company posting earnings or revenue above or below the consensus estimate is known as an "earnings surprise" and may move the stock by a considerable margin.

If the company were to report earnings in line when it publishes results Monday, earnings would be up 25.0%. Revenue would be up 16.16% from the same quarter last year. The company's reported EPS has stacked up against analyst estimates in the past like this:

Stock Performance

Shares of Cadence Design Systems were trading at $140.06 as of April 22. Over the last 52-week period, shares are up 73.79%. Given that these returns are generally positive, long-term shareholders are probably happy going into this earnings release.

Do not be surprised to see the stock move on comments made during its conference call. Cadence Design Systems is scheduled to hold the call at 17:00:00 ET and can be accessed here.