By Stephen Nellis
(Reuters) -Cadence Design Systems forecast a decline in revenue for the first quarter as its hardware sales were up against tough comparisons from a year earlier, during which it ramped up shipments to clear order backlog.
Shares of the company, which counts Arm Holdings (NASDAQ:ARM), Nvidia (NASDAQ:NVDA) and Intel (NASDAQ:INTC) as its customers, fell about 6% in trading after the bell.
The company expects first-quarter revenue to fall about 2% to between $990 million and $1.01 billion. Analysts were expecting $1.08 billion, according to LSEG data.
Cadence makes software for designing everything from chips to jet engines, and the company also sells computing systems designed to run that complex software.
In an interview with Reuters, Nimish Modi, senior vice president of strategy and new ventures at Cadence, said the lower revenue forecast for the first quarter of 2024 is because the company was catching up on hardware shipments in 2023 after supply chain problems the previous year.
"We have expanded our manufacturing capacity, and the lead times now have gone to much more typical numbers," Modi told Reuters.
The San Jose, California-based company expects adjusted per-share profit for the current quarter of between $1.10 and $1.14, well below analysts expectations of $1.37.
Revenue in the last three months of the year stood at $1.07 billion, beating analysts' expectations of $1.06 billion.
Excluding items, the company reported a profit of $1.38 per share in the fourth quarter, above estimates of $1.33 per share.
CFO John Wall said on a post-earnings call that the company had about 1,000 extra employees in 2024, up about 10% from the end of 2022.