Altera Profit Tops Estimates, But Q1 Outlook Weak

(RTTNews) - Programmable chip maker Altera Corp. (ALTR), Thursday reported a decline in fourth-quarter profit, hurt by lower margins even as revenues climbed three percent on the back of new products. Nonetheless, results for the quarter came in ahead of Wall Street expectations.

Moving forward, the company detailed its sales guidance for the first quarter that is indicated to miss current analysts' expectations. Despite the weak guidance, Altera shares gained about three percent in after-hours trade on the Nasdaq.

"Once again, our new products were the quarter's growth drivers, with double digit growth, led by our 28 nm FPGAs," said CEO John Daane.

San Jose, California-based Altera posted Altera fourth-quarter net income of $99 million or $0.31 per share, compared with $121 million or $0.37 per share last year. On average, 26 analysts polled by Thomson Reuters expected the company to earn $0.30 per share for the quarter. Analysts' estimates typically exclude special items.

Results for the quarter included investment-related losses of about $27 million.

Sales for the quarter grew to $454.4 million from $439.4 million a year ago, topping analysts' expectations of $442 million.

New product sales climbed 26 percent year-over-year, while mainstream and mature product lines remained weak.

Sales in Americas edged up 1 percent year-over-year, while Asia Pacific was up a healthy 8 percent. Europe Middle East and Africa sales dropped 10 percent, while Japan gained 20 percent.

Gross margin for the quarter dropped to 68.3 percent from 69.7 percent a year ago, with operating margin down at 25.8 percent from 31.4 percent.

For the first quarter, Altera expect sales to decline 6 percent to 2 percent from the sequential fourth quarter, implying a range of $427.1 million to $445.3 million. Analysts currently expect sales of $447.69 million for the quarter.

Altera also declared a quarterly cash dividend of $0.15 per share, payable on March 3 to stockholders of record on February 10.

Altera stock closed Thursday at $32.93, down $0.39 or 1.17%, on a volume of 3.2 million shares. In after hours, the stock gained $1.04 or 3.16% at $33.97. In the past one year, the stock trended in the range of $30.62 - $39.18.