Altera Q3 Profit Down, But Tops View; Revenue Misses - Update

(RTTNews) - Programmable chip maker Altera Corp. (ALTR), Tuesday reported a lower third-quarter profit, as sales plunged ten percent while operating costs increased. Earnings for the quarter trumped Wall Street expectations, but sales fell short of estimates.

Moving ahead, the company expects fourth quarter sales to decline sequentially. Shares of Altera dropped a near five percent following the news.

Altera's sales for the third quarter dropped 10 percent to $445.95 million from $495.01 million last year. Analysts on consensus expected revenues of $451.81 million for the quarter.

New product sales grew 27 percent year-over-year, while mainstream product sales dropped 25 percent and mature and other product sales decreased 28 percent.

Sales in Americas declined 11 percent year-over-year, while Asia Pacific slipped 18 percent, Europe Middle East and Africa sales edged down 1 percent while sales in Japan improved 2 percent.

Gross margin for the third quarter dropped to 68.3 percent from 69.3 percent a year earlier. Operating margin declined to 28.8 percent from 35.8 percent last year. Operating expenses increased to $176.1 million from $174.3 million last year.

San Jose, California-based Altera's third-quarter profit dropped to $119.4 million or $0.37 per share from $157.5 million or $0.49 per share a year ago. On average, 24 analysts polled by Thomson Reuters expected earnings of $0.34 per share for the quarter. Analysts' estimates typically exclude special items.

Moving ahead, Altera expects sales for the fourth-quarter to be down 3 percent to up 1 percent, compared to the third quarter. Analysts currently estimate revenues of $451.81 million for the quarter.

Altera declared a dividend of $0.15 per share, to be paid on December 2 to stockholders of record on November 12.

ALTR closed Tuesday's trading at $37.32, down $0.14 or 0.37%, on the Nasdaq. The stock further dropped $1.82 or 4.88% in the after hours trade.