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Technology Stocks : Semi Equipment Analysis -- Ignore unavailable to you. Want to Upgrade?

To: JSLyons who wrote (2826)	4/18/2002 12:22:29 AM
From: The Ox	Respond to of 95442

Cadence suggests slow recovery for EDA industry By Richard Goering EE Times April 17, 2002 (10:16 a.m. EST) SAN JOSE, Calif. — Cadence Design Systems Inc. reported Tuesday (April 16) that its year-to-year revenue for the first quarter of 2002 was flat, suggesting that the electronic design automation industry is still awaiting recovery. Cadence said service revenue was down in the first quarter but cited 21 percent product revenue growth, fueled by customer investment in physical design solutions for 0.13-micron ICs. As the largest publicly-held EDA company and the first to report its quarterly figures, Cadence's results are considered something of a bellwether for the EDA industry. Earlier in April, Mentor Graphics Corp. pre-announced that its first-quarter revenues and income will fall short of prior expectations. Cadence generally met expectations, but its first-quarter revenue of $345 million was almost identical to the first quarter of 2001. What dragged the figure down, despite the strong growth in software products, was a continuing plunge in services revenue — from $80 million in the first quarter of 2001, to $43 million in the most recent quarter. Cadence also announced that it is expecting total revenue growth of just 6 percent in 2002, with product revenue up 19 percent and services revenue down another 30 percent. "We do not see any meaningful recovery during the year," said Bill Porter, Cadence's chief financial officer. In an analyst conference call following the release of the company's results, Cadence president and chief executive officer Ray Bingham sounded an optimistic note. "We've again completed a successful quarter against the backdrop of a turbulent economy," he said. Bingham said customers are being very selective in their EDA spending, but are investing heavily to get up to speed with 0.13 micron designs. Cadence's strongest first-quarter areas, Bingham said, were digital IC implementation and mixed-signal custom design. Bingham spoke positively about the First Encounter design planning software that Cadence obtained in its acquisition of Silicon Perspective Corp. "It's been a catalyst for business in every corner of the world," he said, noting that more than 20 customers bought standalone versions of First Encounter in the quarter. Cadence also offers First Encounter as part of SoC Encounter, an IC implementation system that also includes signal-integrity technology, synthesis and layout software. SoC Encounter started shipping in the first quarter, and 11 customers have purchased the complete solution, Cadence said. It replaces Cadence's previously-announced Integration Ensemble, as it offers "a better solution sooner," said Dave De Maria, Cadence's senior vice president for worldwide strategy and marketing. Bingham noted that his company's Quickturn emulation products, a weak area in 2001, enjoyed a "significant improvement" in the first quarter of 2002. The Tality services organization, which brought in $21 million, was not so lucky. "The pipeline looks better, but it hasn't translated into the kinds of orders we'd like to see," he said. Overall, the future looks promising for EDA, Bingham said. "We see a significant retooling opportunity for 0.13 microns that should drive very attractive growth for EDA companies," he said. "That condition will persist for the next several years, and it should drive growth into the 15 to 20 percent range quite easily."

To: JSLyons who wrote (2826)	4/18/2002 9:11:03 AM
From: willcousa	Read Replies (1) \| Respond to of 95442

Jonathan, that is very helpful, many thanks. I have been experimenting with a similar idea and it looks like you have saved me a lot of time and some failed experiments.

To: JSLyons who wrote (2826)	4/18/2002 11:05:44 AM
From: Kirk ©	Read Replies (1) \| Respond to of 95442

Hi Jonathan Interesting... This seems to be very close to how I invest (buy when stocks are going down and take profits when they are going up) and the results from the graph here pretty much match my returns since late 1999 aim-users.com in that we are both up some but down significantly from the bubble peak. What bothers me about that return graph is it seems fairly flat between 1996 and 1999 while most were making 20 or 30 percent a year. Am I reading this correctly? Thanks Kirk out