Altera Q1 Results Top Estimates, Guides Q2 Revenues Above View

(RTTNews) - Programmable chip maker Altera Corp. (ALTR) reported Thursday a profit for the first quarter that edged down from last year, despite improved operating margin and sales growth, hurt by income tax expense. However, both earnings per share and quarterly sales topped analysts' expectations. The company also provided revenue guidance for the second quarter, above Street view.

"The quarter exceeded our expectations as stronger than anticipated Chinese LTE deployments drove wireless sales," Chairman, President and CEO John Daane said in a statement.

San Jose, California-based Altera posted net income of $116.51 million or $0.37 per share for the first quarter, compared to $120.19 million or $0.37 per share in the prior-year quarter.

On average, 24 analysts polled by Thomson Reuters expected the company to report earnings of $0.32 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 12 percent to $461.09 million from $410.50 million in the same quarter last year, and topped twenty-three Wall Street analysts' consensus estimate of $437.97 million.

New product sales climbed 39 percent year-over-year, while mainstream product sales declined 12 percent from last year. Mature and other product line sales improved only 2 percent.

Sales in Americas declined 13 percent year-over-year, while Asia Pacific sales were up a healthy 24 percent from last year. Europe Middle East and Africa sales grew 11 percent, and Japan sales improved 18 percent from a year ago.

Operating margin for the quarter improved 50 basis points to 29.2 percent from last year, as selling, general, and administrative expenses as a percentage of total sales declined 290 basis points, partially offset by a 220 basis points contraction on gross margin.

Altera noted that it has extended its manufacturing partnership with Intel to include development of multi-die devices. This collaboration is an extension of the foundry relationship between Altera and Intel, in which Intel is manufacturing Altera's Stratix® 10 FPGAs and SoCs using Intel's 14 nm Tri-Gate process.

Looking ahead to the second quarter, Altera expects sales to grow 2 to 6 percent sequentially from the first quarter, implying a range of $470.31 million to $488.76 million. Street is currently looking for second-quarter revenues of $461.34 million.

Altera also declared a quarterly cash dividend of $0.15 per share, payable on June 2 to stockholders of record on May 12, 2014.

"We are now shipping Arria 10 FPGAs that offer more logic capacity than any other 20 nm FPGA and speeds that exceed the prior generation high end. Simultaneously, we are making solid progress in the development of our Stratix 10 devices, which use Intel's 14 nm Tri-gate process plus a new FPGA logic architecture to deliver performance twice that of our current high-end FPGA, with vastly more logic resources, lower power and cost," Daane added.

ALTR closed Thursday's regular trading at $34.14, down $0.22 or 0.64% on a volume of 5.02 million shares. However, the stock gained $1.36 or 3.98% in after-hours trading.