DOW JONES NEWSWIRES
Altera Inc. (ALTR) backed its second-quarter projection for a 2%
to 7% sequential rise in revenue as demand continued for 2G and 3G
equipment from Asian wireless networks.
The logic-chip maker had first issued the surprisingly strong
sales guidance, which translates to a range of $269.9 million to
$283.1 million, in April. At the time, the company indicated that
signs of strength beginning to show in the first quarter had
continued into the second.
On Monday, Altera noted new products have been driving growth in
the second quarter. Sales of 65-nanometer devices are up sharply,
while 40-nm devices are on track to double from the first quarter,
as the company expected.
The optimistic outlook continues the upbeat tone from Altera's
first-quarter report, when the company said the quarter had shaped
up better than expected even though earnings fell by nearly half.
Sales to wireless-equipment customers, including those targeting
new 3G deployments in China, were a bright spot.
However, some on Wall Street have been skeptical of how much the
recent recovery in chip orders reflects an improvement in industry
fundamentals, with Robert W. Baird & Co. saying that most of
the strength is a result of inventory replenishments that will eat
into second-half orders.
Morgan Stanley has also raised concerns that China's demand for
3G equipment might slow down in the third quarter, with a recovery
thereafter uncertain.
Wireline telecoms, which represent about 15% of Altera's
revenue, have cut capital spending plans for 2009.
Altera designs chips for use in products such as Internet
routers, mobile-phone base stations, flat-panel televisions and DVD
players.
Its shares were down 0.5% at $17.58 in after-hours trading,
giving back one-quarter of its gain during the regular session. The
shares have risen one-third in the past seven months but remain off
more than a quarter from their 52-week high in mid-August.
-By Jay Miller, Dow Jones Newswires; 201-938-2331;
jay.miller@dowjones.com