Cadence spikes after semi design company beats on earnings and sales while hiking full-year guidance

Solid second-quarter results are propelling semiconductor software and hardware seller Cadence Design Systems sharply higher in the after-hours session.

President and CEO Anirudh Devgan called the quarter “exceptional,” and it seems like traders agree.

Non-GAAP earnings per share of $1.65 handedly beat expectations for $1.56 among analysts polled by Bloomberg, with revenues of $1.275 billion also $25 million higher than anticipated.

For the full year, management sees sales from $5.21 billion to $5.27 billion (versus a prior range of $5.15 billion to $5.23 billion); the Street was looking for $5.2 billion. Cadence’s outlook for adjusted EPS was also boosted to a range of $6.85 to $6.95, up 12 cents from its prior guidance and ahead of analysts’ estimate of $6.77.

Chief Financial Officer John Wall said these results signified that the firm was able to overcome the curbs on sales to China that were in place for a chunk of the quarter.

Cadence, along with peer Synopsys, tumbled in late May after a report indicated that the Commerce Department was directing these so-called electronic design automation companies to stop doing business with China. That decision was then reversed earlier this month.

The company also paid the Departments of Justice and Commerce $140.6 million in settlements this quarter after pleading guilty to violating US export controls by selling to China’s National University of Defense Technology.

“We believe that the company’s China challenges are likely in the rearview mirror, given the penalty, along with the recent lifting of such export controls to the country,” Bloomberg Intelligence analysts Niraj Patel and Maria Beltran wrote.

Shares of Synopsys are also being boosted in after-hours trading thanks to the strong performance of its competitor.