Programmable chip maker Altera Corp. (ALTR), Tuesday reported a decline in profit for the third quarter, as sales slumped five percent and operating costs increased. Nonetheless, both earnings and revenue for the quarter came in ahead of analysts' estimates.
Moving ahead, the company has forecast a sequential sales decline of mid-single to low-double digit.
Altera's sales for the three-month period dropped 5 percent to $495.0 million from $522.5 million last year. Analysts polled by Thomson Reuters estimated revenues of $483.22 million for the quarter.
Chief Executive John Daane said, "Despite uneven global economic conditions, Altera experienced relatively broad vertical market sequential growth with both our new and mainstream product categories performing well."
New product sales represented 31 percent of total sales compared to 27 percent last year. New product sales grew 8 percent year-over-year.
Mainstream product sales represented 32 percent of total sales, same as last year. Mainstream product sales dropped 8 percent year-over-year. Mature product sales represented 37 percent of total sales compared to 41 percent last year. Mature product sales decreased 12 percent.
Sales in Americas grew 6 percent year-over-year, while Asia Pacific declined 6 percent, Europe Middle East and Africa sales slipped 5 percent and Japan dropped 16 percent. Interestingly, all regions posted growth, except Japan, when compared sequentially.
Gross margin for the quarter advanced to 69.3 percent from 68.0 percent a year earlier, while operating margin declined to 35.8 percent from 39.3 percent last year. Total operating costs for the quarter increased to $165.8 million from $164.2 million last year.
San Jose, California-based Altera's third-quarter profit dropped to $157.5 million or $0.49 per share from $185.4 million or $0.57 per share last year. Analysts expected earnings of $0.46 per share for the quarter. Analysts' estimates typically exclude special items.
Looking forward to the fourth quarter, Altera expects fourth-quarter sales to be down 6 to 10 percent sequentially. Analysts currently estimate revenues of $495.99 million for the quarter. Gross margin for the fourth quarter is expected to be between 69 and 70 percent.
Altera declared a dividend of $0.10 per share, to be paid on December 3 to stockholders as of November 13.
ALTR closed Tuesday's trading at $32.62, down $0.30 or 0.91%, on the Nasdaq. The stock further lost $0.51 or 1.56% in after hours trading.
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