It's the "usual" story of decent historical financial results (Earnings meeting expectations, Sales a bit short), but the dreaded "weak guidance" for the future.
I'll be looking for the conference call transcript to see if the poor outlook is blamed on a weak overall economy or semiconductor industry, or if it seems to be particular to Cadence or certain product lines.
Update: Management's Earnings Conference Call Remarks are here. There's no specific information about company or product weakness. Rather, it says
As a result of our discussions with customers in Q4, and our assessment of an increasingly aggressive pricing environment that we have not seen during the past few years, we believe it is prudent to plan our 2008 business conservatively.
The current environment is more uncertain and the value discussions are longer and are harder than in the past several years. However, our strategy is intact, our technology has never been stronger, and we are dedicated to preserve the value of the solutions we are providing to customers.
Sounds like it's those darn stingy customers causing the problem. :-)