) reported earnings of 37 cents per share in the first quarter of
2013, which surpassed the Zacks Consensus Estimate by 4 cents.
Altera reported total revenue of $410.5 million in the first
quarter, up 7.0% year over. The quarter's revenues came below the
Zacks Consensus Estimate of $427.0 million and were within
management's sequential decline guidance range of 4.0%-8.0%. The
year-over-year improvement was mainly due to solid contribution
from the Americas, Europe, the Middle East & Africa (EMEA)
region as well as higher sales of new products.
Sales of new products grew 64.0% from the year-ago quarter, while
revenues from mainstream and mature products declined 3.0% and
Geographically, revenues from EMEA and Americas grew 22.0% and
21.0%, respectively on a year-over-year basis. Revenues from
Asia-Pacific and Japan fell 3.0% each. On an end-market basis;
networking, computer & storage recorded high double-digits
growth, followed by high-single digit growth in telecom and
wireless and low single-digit growth in automotive, broadcast,
military and others.
Sequentially, Altera witnessed lackluster performance from all
the geographical regions, product category and end markets.
Gross margin came in at 69.3%, down from 70.1% in the year-ago
quarter and within management's guided range. Operating margin
came in at 28.7%, down from 30.4% in the year-ago quarter. Total
operating expenses grew 9.5% year over year, reflecting higher
sales and marketing expenses.
Reported net income was $120.2 million or 37 cents per share
compared with $115.8 million or 35 cents per share in the first
quarter of 2012.
Balance Sheet & Cash Flow
Altera exited the quarter with cash and short-term investment
balance of $3.12 billion and operating cash of $149.5 million.
Capital expenditure was $14.6 million.
Altera did not make any share repurchases during the quarter. The
company declared a quarterly dividend of 10 cents per share,
which will be paid on Jun 3 to stockholders of record as of May
Altera expects sales to be flat to up 4.0% sequentially in the
second quarter of 2013. The revenue improvement could be due to
an expected turnaround in telecom & wireless as well as auto,
industrial, and military end markets. Networking and storage end
markets are expected to lag. The Others category is expected to
remain flat sequentially.
Management projects gross margin of 69% (+/- 0.5%) in the second
quarter, roughly in line with the first quarter. Research and
development expenses are expected in the range of $97.0 million
to $99 million, while SG&A will range between $77 million and
$79 million. Tax rate is expected in the range of 12.0%-13.0%.
Altera has delivered mixed first-quarter 2013 results with
earnings beating the Zacks Consensus Estimate and revenues
missing the same. However, revenues grew year over year with
support from geographical contributions, decent end-market
performance and higher sales of new products. Guidance was
encouraging citing some turnaround in the end markets barring
networking & storage end markets.
) also reported modest results for the fourth quarter of fiscal
2013 and provided a better guidance for the first quarter citing
higher revenues from all geographic regions, better demand
situation for its 28nm node products and expected traction in its
20nm products, which are ready to be shipped.
Though Altera's association with chip maker
) will keep it ahead of its peers, synergies from the partnership
is not likely to boost fundamentals in the near term.
Currently, Altera holds a Zacks Rank #4 (Sell). Not all
semiconductor stocks are performing as poorly as Altera. We
) with a Zacks Rank #2 (Buy).
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