Programmable chip maker Altera Corp. (ALTR: Quote), Tuesday reported a decline in profit for the second quarter, as sales dropped 15 percent and margins decreased significantly.
Nonetheless, shares of Altera rose over 10 percent in after hours, as the quarterly earnings and revenue trumped Street expectations. Moving ahead, the company has forecast a low-to-mid single digit sequential sales growth for the third quarter, reflecting strong sales of its new products.
Altera's net sales for the second quarter dropped 15 percent to $464.8 million from $548.4 million last year. Analysts estimated revenues of $445.23 million for the quarter. Sequentially, revenues increased 21 percent.
Chief Executive John Daane said, "New product revenue surged this quarter, as sales of both 28-nm and 40-nm accelerated strongly, driving the sharp revenue improvement from the prior quarter."
New product sales represented 31 percent of total sales compared to just 18 percent last year. New product sales grew 43 percent year-over-year.
For the quarter, the company's sales in Americas dropped 22 percent year-over-year, while Asia Pacific declined 4 percent, Europe Middle East and Africa sales slipped 28 percent. Japan sales declined 15 percent. Interestingly, all regions posted growth when compared sequentially.
Gross margin for the quarter dropped to 69.6 percent from 70.9 percent a year earlier, while operating margin declined to 34.3 percent from 43.4 percent last year.
San Jose, California-based Altera's net income for the second quarter dropped to $162.7 million $0.50 per share from $214.6 million $0.65 per share last year. On average, 29 analysts polled by Thomson Reuters expected earnings of $0.39 per share for the quarter. Analysts' estimates typically exclude one-time items.
Going forward, Altera expects third-quarter sales to be up 2 to 6 percent sequentially. Analysts currently expect revenues of $470.69 million for the quarter. Gross margin for the third quarter is expected to be 70 percent, plus or minus 0.5 percent.
Altera boosted its quarterly dividend to $0.10 per share from $0.08 per share. Payable on September 4 to stockholders of record on August 10.
Altera shares closed Tuesday's trading on the Nasdaq at $30.67, down $0.45 or 1.45%. However, the stock gained $2.83 or 9.23% in after hours trading.
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by RTT Staff Writer
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