Altera Q4 Profit Rises On Lower Expenses, EPS Tops Estimate; Sees Q1 Sales Down Sequentially

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Tuesday, Altera Corp. (ALTR), a programmable logic devices manufacturer, reported that its fourth quarter earnings increased 27% from the same period last year, helped by lower expenses, despite a 3% decline in sales. The company's earnings per share beat mean analysts estimate, while net sales missed estimate. The company also issued financial outlook for the first quarter of fiscal 2009.

The San Jose, California-based company reported net income for the fourth quarter of $83.04 million or $0.28 per share, up from $65.48 million or $0.20 per share for the year-ago quarter.

On average, 19 analysts polled by First Call/Thomson Financial expected the company to earn $0.27 per share for the quarter. Analysts' estimate typically excludes special items.

Net sales for the quarter decreased 3% to $314.54 million from $323.17 million in the prior-year quarter, and missed analysts' revenue consensus of $318.74 million.

Communications segment generated 44% of revenues, while Industrial segment posted a 36% growth. Revenue from Consumer segment and Computer & Storage segment improved 14% and 6%, respectively.

Altera, the world's second- biggest maker of programmable semiconductors, on December 8, lowered its revenue outlook to be down 9% to 12%, compared to the previous guidance of up 1% to down 3% from the third quarter, due to lower than anticipated sales across all market segments.
Total operating expenses declined to $131.60 million from $141.64 million in the same quarter of 2007. The company expected fourth quarter operating expense to be in the range of $134 million to $135 million.

Altera's larger rival Xilinx Inc. (XLNX) reported net income of $139.4 million or $0.51 per share and sales of $458.39 million for the third quarter.

The company planed to make initial shipments of 40-nm Stratix IV devices to customers during the fourth quarter.

Altera's president, chief executive officer, and chairman of the board, John Daane said, " As previously committed, we shipped our first 40-nm Stratix IV FPGAs in the fourth quarter, placing us in a leadership position that will strengthen our competitive position in 2009 and beyond."

Altera's Stratix IV family is the industry's first 40-nm FPGA and is one of the few 40-nm devices offered across the entire semiconductor industry.

Altera's board of directors has declared a quarterly dividend of $0.05 per share payable on March 2, to shareholders of record on February 10.

During the quarter, Altera repurchased 9.0 million shares of its common stock at a cost of $154.2 million, resulting in total shares repurchased of 26.6 million at a cost of $473.2 million for fiscal 2008.

For the full year, net income rose to $359.65 million or $1.18 per share from $290.02 million or $0.82 per share reported in the corresponding period last year. For fiscal 2008, net sales increased to $1.37 billion from $1.26 billion a year ago.

Cash and short-term investments at the end of December 31, 2008 was $1.216 billion, while it was $1.021 million at the end of December 31, 2007. Inventories for the respective periods were $84.64 million and $74.11 million.

Looking ahead to the first quarter of fiscal 2009, the company expects sequential sales growth to down 15% - 25%. Research and development expenses are estimated to range from $62 million to $64 million. Selling, general and administrative expenses are expected to be in the range of $58 million - $60 million.

Altera closed Tuesday's regular trading at $16.65, up $0.66 or 4.13%, on a volume of 10.63 million shares on the Nasdaq. In after-hours trade, the stock is currently trading at up $0.05 or 0.30% trading at $16.70.

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