DOW JONES NEWSWIRES
Altera Inc. (ALTR) presented a more optimistic - though still
"muted" - view of first-quarter revenue than it had in January
because of better-than-expected demand from manufacturers providing
equipment for Chinese 3G wireless networks.
Altera has bucked trends in the semiconductor sector by posting
strong earnings despite declining demand, partially by cutting
costs.
The logic-chip maker now expects revenue to decline 15% to 20%
sequentially, compared with its January prediction of a 15%-to-25%
sequential decline to a range of $235.9 million to $267.3 million,
which was below Wall Street's estimates at that time.
Analysts' latest estimate was for revenue of $253.8 million,
down 24% from a year earlier, according to a poll by Thomson
Reuters.
One of Altera's largest customers, Cisco Systems Inc. (CSCO),
last month predicted revenue for the quarter ending in April could
drop 15% to 20% from a year earlier. While Cisco's orders for the
fiscal second quarter shrank 14%, its January orders were down
20%.
Wireline telecoms, which represent about 15% of Altera's
revenue, have cut capital spending plans for 2009. However,
wireless infrastructure spending is expected to remain stable this
year and to increase in China, where Altera is positioned to
benefit.
Altera's fourth-quarter net income climbed 27% as cost cutting
more than offset a 2.7% decline in sales. Despite the dropoff in
consumer demand for computers and other electronic devices, the
company has continued to do well as demand for its programmable
logic integrated circuits remains strong and margins continue to
hold.
Altera designs chips for use in products such as Internet
routers, mobile-phone base stations, flat-panel televisions and DVD
players.
Its shares closed Monday at $14.56, down 5%, amid a general
market selloff. The stock price has fallen 40% in the past six
months.
-By Kathy Shwiff, Dow Jones Newswires; 201-938-5975;
Kathy.Shwiff@dowjones.com