Altera Third Quarter Earnings on the Horizon

S&P 500 (NYSE:SPY) component Altera (NASDAQ:ALTR) will unveil its latest earnings on Tuesday, October 23, 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 net income of 46 cents per share, a decline of 19.3% from the company’s actual earnings for the same quarter a year ago. During the past three months, the average estimate has moved up from 44 cents. Between one and three months ago, the average estimate moved up. It has been unchanged at 46 cents during the last month. Analysts are projecting profit to rise by 23.8% versus last year to $1.79.

Last quarter, the company came in at profit of 50 cents per share against a mean estimate of net income of 39 cents per share, beating estimates after missing them in the previous quarter. In the first quarter, it missed forecasts by one cent.

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A Look Back: In the second quarter, profit fell 24.2% to $162.7 million (50 cents a share) from $214.6 million (65 cents a share) the year earlier, but exceeded analyst expectations. Revenue fell 15.2% to $464.8 million from $548.4 million.

Stock Price Performance: Between September 19, 2012 and October 17, 2012, the stock price dropped $3.70 (-10%), from $37.09 to $33.39. 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 September 14, 2012 and October 1, 2012 when shares fell for 12 straight days, dropping 11.3% (-$4.30) over that span.

Balance Sheet Analysis: The company’s current ratio of assets to liabilities came in at 6.17 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.

Key Stats:

On the top line, the company is hoping to use this earnings announcement to snap a string of four-straight quarters of revenue decreases. Revenue fell 0.9% in the third quarter of the last fiscal year, 17.6% in fourth quarter of the last fiscal year and 28.4% in the first quarter and then fell again in the second quarter.

Heading into this earnings announcement, net income has dropped 31% on average for the last four quarters.

Wall St. Revenue Expectations: Analysts predict a decline of 7.5% in revenue from the year-earlier quarter to $483.2 million.

Analyst Ratings: There are 12 out of 22 analysts surveyed (54.5%) rating Altera a buy.

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

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