Altera Corporation (
) designs, manufactures, and markets a broad range of
high-performance, high-density Programmable Logic Devices (PLDs)
and associated development tools.
ALTERA CORP (ALTR): Free Stock Analysis
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Headquartered in San Jose, California, Altera combines the
programmable logic technology (originally invented in 1983) with
software tools and intellectual property to provide high-value
programmable solutions to over 13,000 customers through direct
sales force and distributors.
The company has been publicly traded since 1988 and employs
approximately 2,600 employees worldwide.
Altera's customers are large multi-national corporations as well
as small companies in communications, computer and storage,
industrial, and consumer market segments.
Disappointing Third Quarter Results
The company reported its third quarter results on October 23,
2013. Sales for the quarter came in at $445.9 million, up 6% from
the second quarter of 2013 but down 10% from the third quarter of
Net income for the quarter was $119.4 million , $0.37
per share, compared $0.31 per share, in the
previous quarter and $0.49 per share, in the same
quarter of 2012.
The EPS number was actually ahead of the Zacks consensus estimate
of $0.34 per share, but the revenue number was short of the Zacks
Consensus Estimate of $452 million.
Further for the fourth quarter, the management expects revenue in
the range of minus 3% to plus 1% and gross margin to be 68.5%,
plus or minus half a point.
Due to revenue miss and disappointing guidance, 14 analysts have
revised their estimates for the current quarter downwards in the
last 60 days. Current estimates for the last quarter of 2013
stand at $0.30 per share, down from $0.37 per share 60 days ago.
Similarly estimates for 2013 and 2014 have come down to $1.36 and
$1.59 per share respectively, from $1.41 and $1.81 per share.
Downward revisions have sent the stock back to Zacks Rank #5
(Strong Sell) earlier this month.
The Bottom Line
Considering the weakening demand for Altera's products and
increased competition in the industry coupled with soft market
and declining margins, we suspect that this stock will remain
under pressure in the near-to-medium term.
ALTR is currently Zacks Rank # 5 (Strong Sell) stock. Further the
Zacks Industry rank of 253 (out of 265) also indicates further
weakness in the short term. Investors looking for exposure to
Semiconductors/related industries could consider Taiwan
Semiconductors (TSM)-a Zacks Rank #1 stock, which also has a
longer-term 'Outperform' recommendation.
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