Stock markets kept up their positive momentum on Monday, with all three major market benchmarks extending their gains from the past few weeks. The Dow Jones Industrial Average (^DJI 1.73%) led the way higher, but gains for the Nasdaq Composite (^IXIC 2.15%) and S&P 500 (^GSPC 1.67%) kept most investors happy.
|
Index |
Percentage Change |
Point Change |
|---|---|---|
|
Dow Jones Industrials |
+0.52% |
+184 |
|
S&P 500 |
+0.40% |
+18 |
|
Nasdaq Composite |
+0.19% |
+26 |
Data source: Yahoo! Finance.
This week is a big one for earnings, and a couple of stocks made major moves late Monday after releasing their latest financial results. F5 Networks (FFIV 3.81%) managed to post a good-size move higher after hours on Monday evening, but Cadence Design Systems (CDNS 3.13%) moved in the other direction. Here's the latest on both stocks and what investors are thinking about them right now.
F5 makes the connection
F5 saw its stock jump 10% in after-hours trading on Monday. The tech company reported fiscal third-quarter financial results for the period ended June 30 that featured solid growth in key areas.
The numbers showed modest but steady growth. Revenue inched higher by 4% year over year to $703 million, with global services revenue leading the way with a gain of 8%. Product revenue was mixed, with systems-related sales climbing but software revenue giving back a good portion of those gains. Adjusted net income climbed more than 25% to $194 million, with adjusted earnings working out to $3.21 per share.
Key Data Points
Investors also seemed pleased with F5's guidance for the coming quarter. Fiscal fourth-quarter revenue should be between $690 million and $710 million, which would be consistent with the just-ended period's sales. Similarly, adjusted earnings of $3.15 to $3.27 per share wouldn't represent much if any sequential growth, but it would show that F5 can hold its own even in a tough macroeconomic environment.
Multi-cloud application services and security have become an important niche, and F5 is doing a good job of filling it. Yet the stock hasn't done much to recover its lost ground since late 2021, and that leaves open an opportunity for the company to keep taking steps to reignite its growth.
Cadence can't keep up the pace
Elsewhere, shares of Cadence Design Systems were down more than 4% after hours on Monday. The AI stock produced sizable growth in the second quarter of 2023, but investors seemed to have even higher expectations that Cadence couldn't quite meet.
Second-quarter financial results were solid. Revenue climbed 14% year over year to $977 million. Adjusted net income climbed to $334 million, up about 11% from year-ago levels and working out to $1.08 per share in adjusted earnings.
NASDAQ: CDNS
Key Data Points
CEO Anirudh Devgan pointed to the rising impact of generative AI in driving Cadence's business, along with expertise in computation software and its trove of experience with data. The company also boosted its guidance for 2023, anticipating growth of more than 14% in sales for the full year compared to 2022, and earnings of between $5.05 and $5.11 per share on an adjusted basis.
Yet with Cadence's stock having risen more than 50% just in 2023 alone, shareholders wanted even better growth given the high potential of AI. That has set a bar that will be hard for Cadence to clear, but the good news is that investors will be paying close attention to how the company does for the rest of the year and beyond.
