Altera Second Quarter Earnings Sneak Peek

S&P 500 (NYSE:SPY) component Altera (NASDAQ:ALTR) will unveil its latest earnings on Tuesday, July 24, 2012. Altera designs and manufactures programmable logic devices, HardCopy ASIC devices, pre-defined design building blocks, cores, and associated development tools.

Altera Earnings Preview Cheat Sheet

Wall St. Earnings Expectations: The average estimate of analysts is for profit of 39 cents per share, a decline of 40% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved down from 40 cents. Between one and three months ago, the average estimate moved down. It has been unchanged at 39 cents during the last month. Analysts are projecting profit to rise by 29.4% compared to last year’s $1.66.

Past Earnings Performance: The company fell short of estimates last quarter after topping forecasts the quarter prior. In the first quarter, it reported net income of 35 cents per share against a mean estimate of 36 cents. Two quarters ago, it beat expectations by 4 cents with profit of 45 cents.

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A Look Back: In the first quarter, profit fell 48.3% to $115.8 million (35 cents a share) from $224.1 million (68 cents a share) the year earlier, missing analyst expectations. Revenue fell 28.4% to $383.8 million from $535.8 million.

Wall St. Revenue Expectations: On average, analysts predict $445.3 million in revenue this quarter, a decline of 18.8% from the year-ago quarter. Analysts are forecasting total revenue of $1.8 billion for the year, a decline of 12.6% from last year’s revenue of $2.06 billion.

Stock Price Performance: Between April 23, 2012 and July 18, 2012, the stock price fell $2.77 (-8%), from $34.55 to $31.78. The stock price saw one of its best stretches over the last year between March 12, 2012 and March 19, 2012, when shares rose for six straight days, increasing 5.3% (+$1.99) over that span. It saw one of its worst periods between July 3, 2012 and July 12, 2012 when shares fell for seven straight days, dropping 9.5% (-$3.25) over that span.

Key Stats:

After experiencing income drops the past three quarters, the company is hoping to use this earnings announcement to rebound. Net income fell 14.8% in the third quarter of the last fiscal year, by 36.7% in the fourth quarter of the last fiscal year and again in the first quarter.

On the top line, the company is hoping to use this earnings announcement to snap a string of three-straight quarters of revenue declines. Revenue fell 0.9% in the third quarter of the last fiscal year and 17.6% in fourth quarter of the last fiscal year before falling again in the first quarter.

Analyst Ratings: There are 12 out of 20 analysts surveyed (60%) rating Altera a buy.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 4.07 last quarter. Having a ratio above 2:1 is usually considered a good indicator of a company’s liquidity and ability to meet creditor demands.

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

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