Altera Corp. (NASDAQ: ALTR): Q2 Earnings Preview 2011

Altera Corp. (NASDAQ: ALTR) is scheduled to release its second-quarter earnings after the closing bell on Tuesday, July 19, 2011. Analysts, on average, expect the company to report earnings of 64 cents per share on revenue of $548.76 million. In the year ago quarter, the company reported earnings of 58 cents per share on revenue of $469.30 million.

Altera Corporation designs, manufactures, and markets programmable logic devices (PLD), HardCopy application-specific integrated circuit (ASIC) devices, pre-defined design building blocks, and associated development tools.

The company has now seen net income rise in three straight quarters. Altera has enjoyed double-digit year-over-year percentage revenue growth for the past four quarters.

In the preceding first quarter, the San Jose, California-based  company's net income was $224.1 million, 68 cents per share, $153.2 million, 50 cents per share, in the year-ago quarter. Net sales increased 33% to $535.8 million from $402.3 million in the same quarter last year. Analysts, on average, expected the company to report earnings of 65 cents per share on revenue of $536.63 million.

Last month, the company reaffirmed that it continues to expect second quarter sales to be in line with its previous guidance for flat to up five percent sequential growth. Further, the company said it continues to believe that the Telecom and Wireless vertical market would be up sequentially, while the company's other vertical markets would be flat to down..

In the long run, Altera expects its largest vertical – telecom and wireless to continue growing but, industrial, military and automotive will grow faster than other end-markets. Altera expects gross margin to gradually decline to 65% by 2012 – 2015. The company targets an operating margin around 36%.

The company continues to benefit from big trends in the build-out of next-generation wireless networks. The company is enjoying strong demand for its chips used in cell phone base stations, network routers, digital cameras and other areas. But earnings increases are seen slowing as countries finish building out their 3G and 4G wireless networks, and year-ago comparisons become more difficult. Rebounds in the auto and industrial markets also are providing a lift. It is also grabbing share from competitors while maintaining its focused strategy to lead in speed, density, low-power consumption, time-to-market and high-value features.

China has been a major source of growth for Altera as its versatile chips become more appealing to customers facing spiraling investment costs to develop specialized processors. The maker of programmable logic devices will likely get a spark from China Mobile's increased infrastructure spending. China's top mobile carrier plans $20.2 bil in capital spending this year and $39 bil from 2012-13. 

Full Disclosure: None.

Altera Corp. (NASDAQ: ALTR): Q1 Earnings Preview 2011

Altera Corp. (NASDAQ: ALTR) is scheduled to release its first-quarter earnings after the closing bell on Tuesday, April 26, 2011. Analysts, on average, expect the company to report earnings of 65 cents per share on revenue of $536.63 million. In the year ago quarter, the company reported earnings of 50 cents per share on revenue of $402.30 million.

Altera Corporation designs, manufactures, and markets programmable logic devices (PLD), HardCopy application-specific integrated circuit (ASIC) devices, pre-defined design building blocks, and associated development tools.

In the preceding fourth quarter, the San Jose, California-based  company's net income was $231.61 million or $0.72 per share from $102.97 million or $0.34 per share in the previous year. Net sales increased to $555.38 million from $365.00 million a year ago. .  Analysts, on average, expected the company to report earnings of 71 cents per share on revenue of $527.45 million.

Late in March, the company reaffirmed that it continues to expect sales for the first quarter to decline one to five percent sequentially. The decline in sales implies a sales guidance of $527.8 million – $549.9 million. Altera continues to believe that the Industrial Automation, Military & Automotive vertical market will be up sequentially in the first quarter, while sales in the company's other vertical markets will be flat to down. Revenues from Telecom & Wireless are expected to decline as few customers have rebalanced their inventories as the fourth round of TD-SCDMA deployment was completed in the fourth quarter. This should be partially offset by growth in WCDMA and LTE. Computer and Storage Networking is projected to be flat or down slightly. Gross margin is expected to come around 71% to 72%.

In the long run, Altera expects its largest vertical – telecom and wireless to continue growing but, industrial, military and automotive will grow faster than other end-markets. Altera expects gross margin to gradually decline to 65% by 2012 – 2015. The company targets an operating margin around 36%.

Last month, Altera said that design wins in 40-nanometer are well ahead of any previous generation products. Altera continues to benefit from the growth in 65-nm and 40-nm FPGAs as customer designs move from prototyping to production.In 2010, Altera focused on 28-nm development and will introduce more products in 28-nm than any previous process node in the coming years. Recently, the company announced that it set an industry milestone in semiconductor technology by delivering the most transistors ever packed onto an integrated circuit. Altera's 28-nm Stratix(R) V FPGAs are the semiconductor industry's first devices to feature 3.9 billion transistors. Samples of the first member of Altera's Stratix V FPGA family (Stratix V 5SGXA7) are shipping now.

The company continues to benefit from big trends in the build-out of next-generation wireless networks.  Rebounds in the auto and industrial markets also are providing a lift. It is also grabbing share from competitors while maintaining its focused strategy to lead in speed, density, low-power consumption, time-to-market and high-value features.

China has been a major source of growth for Altera as its versatile chips become more appealing to customers facing spiraling investment costs to develop specialized processors. The maker of programmable logic devices will likely get a spark from China Mobile's increased infrastructure spending. China's top mobile carrier plans $20.2 bil in capital spending this year and $39 bil from 2012-13. 

The company's stock currently trades at a forward P/E (fye Dec 31, 2012) of 17.28 and PEG ratio (5 yr expected) of 1.27. In terms of stock performance, Altera shares have gained nearly 52 percent over the past year.

Full Disclosure: None.

Altera Corp. (NASDAQ: ALTR): Q4 Earnings Preview

Altera Corp. (NASDAQ: ALTR) is scheduled to release its fourth-quarter financial results after the closing bell on Tuesday, January 25, 2011. Analysts, on average, expect the company to report earnings of 71 cents per share on revenue of $547.63 million. In the year ago quarter, the company reported earnings of 34 cents per share on revenue of $365.00 million.

Altera Corporation designs, manufactures, and markets programmable logic devices (PLD), HardCopy application-specific integrated circuit (ASIC) devices, pre-defined design building blocks, and associated development tools.

In the preceding third quarter, the San Jose, California-based  company's net income was $217.49 million or $0.69 per share from $56.70 million or $0.19 per share in the previous year. Net sales for the quarter were $527.45 million, up 84% from $286.61 million a year ago.  Analysts, on average, expected the company to report earnings of $0.65 per share on revenue of $525.98 million.

Late in November, the company reaffirmed that it expects sequential sales growth in the range of 3% to 6% and gross margin in the range of 70% to 71% for the fourth quarter. The guidance implies a revenue guidance of $543.3 – $559.2 million. The company said its new products have been the company's growth drivers with both Stratix IV and Arria II 40-nm FPGAs posting particularly strong quarterly comparisons. In terms of end-markets, communications should continue to grow as China and India upgrade to 3G and U.S. and Japan deploy 4G networks. Networking, computer and storage should increase driven by networking. The automotive, industrial, military and the other markets are forecasted to be flat to slightly down.

Altera also provided preliminary guidance for 2011. Although the company did not provide guidance for revenues but it stated that gross margin should come around 70%, +/- 1%. Altera expects R&D expenditure to come around $330 million, up 26% yearover year. The increase in R&D spending is due to incremental 28-nanometer product introduction costs. SG&A is estimated at around $265 million, up 5% year over year.

Growth rates are expected to moderate from the highs of 2010. In the long run, Altera expects its largest vertical – telecom and wireless to continue growing but, industrial, military and automotive will grow faster than other end-markets. Altera expects gross margin to gradually decline to 65% by 2012 – 2015. The company targets an operating margin around 36%.

Longer-term, Altera stated that although design wins at 40-nm node continue to grow, 2011 will be the year of 28-nm. Altera will start to ship 28-nm Stratix V FPGAs in the first quarter of 2011 and introduce other 28-nm families which address a broad range of markets and applications. Altera plans to have more products at 28-nm than in any previous process generation.

However, 40-nm will be a major contributor to the total revenue growth over the next several years and 28-nm revenues will take a while to become meaningful. Altera nudged past prime rival Xilinx Inc. (NASDAQ: XLNX) at the 40-nm node and gained market share in 2010. The company also seems to have an edge over Xilinx for the 28-nm node.

The company continues to benefit from big trends in the build-out of next-generation wireless networks. It is also grabing share from competitors while maintaining its focused strategy to lead in speed, density, low-power consumption, time-to-market and high-value features.

In terms of stock performance, Altera shares have gained nearly 75 percent over the past year.

Full Disclosure: None.