Altera Earnings: TOPS Wall Street Expectations

S&P 500 (NYSE:SPY) component Altera Corporation (NASDAQ:ALTR) posted a decrease in profit as revenue declined. Altera designs and manufactures programmable logic devices, HardCopy ASIC devices, pre-defined design building blocks, cores, and associated development tools.

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Altera Earnings Cheat Sheet for the Second Quarter

Results: Net income for the logic development fell to $162.7 million (50 cents per share) vs. $214.6 million (65 cents per share) a year earlier. This is a decline of 24.2% from the year-earlier quarter.

Revenue: Fell 15.2% to $464.8 million from the year-earlier quarter.

Actual vs. Wall St. Expectations: Altera Corporation beat the mean analyst estimate of 39 cents per share. It beat the average revenue estimate of $445.2 million.

Quoting Management: “New product revenue surged this quarter, as sales of both 28-nm and 40-nm accelerated strongly, driving the sharp revenue improvement from the prior quarter. Though growth was quite broad, the results in our Telecom and Wireless vertical market were particularly notable,” said John Daane, president, chief executive officer, and chairman of the board. “Leading edge 28-nm FPGAs are creating more opportunities for us as we displace more ASICs and ASSPs. Our 28-nm competitive position remains strong. We estimate that to date we have secured the majority of available 28-nm FPGA design win value.”

Key Stats:

For each of the last four quarters, the company has seen its net income fall. In the first quarter, net income fell 48.3% while the figure fell 36.7% in the fourth quarter of the last fiscal year and 14.8% in the third quarter of the last fiscal year.

Last quarter was the fifth in a row that the company saw shrinking gross margins, as they fell 1.3 percentage points from the year-earlier quarter to 69.6%. Over that time, margins have contracted on average 1.5 percentage points per quarter on a year-over-year basis.

Revenue has fallen for the last four quarters. Revenue declined 28.4% to $383.8 million in the first quarter. The figure fell 17.6% in the fourth quarter of the last fiscal year from the year earlier and dropped 0.9% in the third quarter of the last fiscal year from the year-ago quarter.

The company topped expectations last quarter after falling short of forecasts in the first quarter with net income of 35 cents versus a mean estimate of net income of 36 cents per share.

Looking Forward: Over the past ninety days, the average estimate for the third quarter has fallen from 45 cents per share to 43 cents, indicating that analysts are growing pessisimistic about the company’s performance next quarter. For the fiscal year, the average estimate has moved down from $1.69 a share to $1.65 over the last sixty days.

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(Company fundamentals provided by Xignite Financials. Earnings estimates provided by Zacks)

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