On January 12, 2013, Zacks Investment Research downgraded
) to a Zacks Rank #5 (Strong Sell).
Why the Downgrade?
Altera has witnessed sharp downward estimate revisions after its
modest third quarter 2012 results and lowering of revenue
guidance for the fourth quarter. The shares of this Logic device
manufacturer have been range bound since October. Additionally,
given its expected revenue decline in the upcoming quarter, the
shares have downside risk.
On October 23, 2012, Altera reported third quarter earnings per
share of 49 cents, ahead of the Zacks Consensus Estimate by 6.5%
but down 14.0% from the year-ago quarter. Revenues dropped 5.0%
from the year-ago quarter.
On December 4, 2012, the company announced that it expects
revenue for the fourth quarter to decline 8.0%-10.0% sequentially
(previously 6.0%-10.0%). The company believes that weak sales of
legacy products will likely offset the increasing sales of new
products. The company also expects operating expenses to grow
Above all, Gartner's prediction for a 3.0% decline in the
semiconductor market in 2012 and dwindling PC market are
The Zacks Consensus Estimate for 2012 decreased 0.6% to $1.73 per
share over the last 60 days. For 2013, most of the estimates were
lowered over the last 60 days, which pulled down the Zacks
Consensus Estimate by 5.9% to $1.76 per share. Over the last 90
days, estimates for 2012 and 2013 dropped 3.4% and 16.2%,
Altera operates in the semiconductor industry and is a key player
in the programmable logic devices (PLDs) market. Altera shares
its PLD space with
) and the two companies jointly hold roughly 85.0% market share.
Other Stocks to Consider
Not all semiconductor stocks are performing as poorly as Altera.
), which has a Zacks Rank #1 (Strong Buy).
MEMC Electronic Materials
), which have a Zacks Rank #2 (Buy) are also looking good at
ALTERA CORP (ALTR): Free Stock Analysis
CIRRUS LOGIC (CRUS): Free Stock Analysis
OMNIVISION TECH (OVTI): Free Stock Analysis
MEMC ELEC MATRL (WFR): Free Stock Analysis
XILINX INC (XLNX): Free Stock Analysis Report
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