Altera Q4 Profit Tops View, But Sales Miss; Guides Q1 Revenues Below View

(RTTNews) - Programmable chip maker Altera Corp. (ALTR) reported Thursday a profit for the fourth quarter that grew from last year, despite revenue growth, reflecting lower operating margin and income tax expense drop. Earnings per share topped analysts' expectations by a penny, while quarterly sales missed their estimates by a whisker. The company also provided revenue guidance for the first quarter, below Street view.

"We grew 12 percent in 2014, outpacing the semiconductor industry. Our Arria 10 FPGAs, the first of our Generation 10 products, are proving to be competitively quite strong with good design-win momentum and record opportunities to pursue," Chairman, President and CEO John Daane said in a statement.

San Jose, California-based Altera posted net income of $111.13 million or $0.36 per share for the fourth quarter, higher than $98.93 million or $0.31 per per share in the prior-year quarter.

On average, 25 analysts polled by Thomson Reuters expected the company to report earnings of $0.35 per share for the quarter. Analysts' estimates typically exclude special items.

Net sales for the quarter grew 6 percent to $479.87 million from $454.37 million in the same quarter last year, but missed twenty-four Wall Street analysts' consensus estimate of $480.48 million by a whisker.

New product sales climbed 32 percent year-over-year, while mainstream product sales declined 20 percent from last year. Mature and other product line sales also decreased 17 percent.

Sales in Americas declined 13 percent year-over-year, while Asia Pacific sales were up 7 percent from last year. Europe Middle East and Africa sales grew 29 percent, while Japan sales decreased 12 percent from a year ago.

Operating margin for the quarter contracted 60 basis points to 25.2 percent from last year, as gross margin declined 330 basis points, partially offset by a 170 basis points improvement in selling, general, and administrative expenses as a percentage of total sales.

Income tax expense plunged to $4.04 million from $14.88 million in the prior-year quarter.

Altera also said its board of director's has declared a quarterly cash dividend of $0.18 per share, payable on March 2 to stockholders of record on February 10, 2015.

Looking ahead to the first quarter, Altera expects sales to be between flat and down 4 percent sequentially, implying a range of $460.68 million to $479.87 million. Street is currently looking for revenues of $486.27 million for the quarter.

"We are entering the advanced stages of design for our high-end Stratix 10 FPGA, the industry's only 14 nanometer FinFET-based FPGA, with planned introduction later this year," Daane added.

ALTR closed Thursday's regular trading at $35.19, up $0.46 or 1.32% on a volume of 7.65 million shares. However, the stock lost $0.69 or 1.96% in after-hours trading.