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Altera meets estimates
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October 16, 2000: 7:59 p.m. ET
Semiconductor company's third-quarter revenue surges 84 percent
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NEW YORK (CNNfn) - The semiconductor maker Altera Corp. reported third-quarter earnings that met analyst estimates on revenue that was slightly ahead of the company's previous forecast.
San Jose, Calif.-based Altera (ALTR: Research, Estimates) said that its third-quarter net income rose to $118 million, or 28 cents per share, from $55.6 million, or 13 cents, in the same period last year. That was even with the mean analyst estimate, according to earnings estimate tracker First Call.
Altera's revenue soared 84 percent to $395.4 million from $215.12 million. The company had forecast last August that its revenue would grow to about $392 million in the third quarter, from $340.7 million in the second quarter.
Altera makes programmable logic devices, one of the fastest growing types of semiconductors. Programmable logic devices are chips that can be programmed by a customer at its factory. Altera was the first supplier of Complementary Metal Oxide Semiconductor (CMOS) programmable logic devices and is a leader in that market.
"Following an extraordinary June quarter, the strong 16 percent sequential growth we posted in this typically seasonally slow period reflects the very solid business conditions we see in our end markets," said Rodney Smith, the company's president and CEO, in a statement. "Growth continues to be led by customers in the communications market, where the benefits of Altera devices that deliver greater design flexibility and faster time-to-market are particularly appealing. Our new products remain solid growth drivers."
The stocks of Altera and competitor Xilinx Inc. plunged on Oct. 10 after they were downgraded by both Lehman Brothers and Salomon Smith Barney. On that date, Lehman Brothers analyst Daniel Niles downgraded Altera and Xilinx (XLNX: Research, Estimates) to "neutral," saying in a research note that revenue growth rates for the next two quarters are likely to slow "as both end customers and contract manufacturers rebalance inventory and order rates as components become more available."
"The near record margin levels will make further earnings per share upside dependent on higher revenue growth," Niles wrote. "Greater than 75 percent year-over-year revenue growth for both Altera and Xilinx in the September quarter is hard to reconcile or maintain when their major end markets are growing closer to 30-40 percent."
Altera closed at $32.44, down 50 cents.
Separately, Altera said Monday its board of directors has doubled to 48 million from 24 million the number of shares authorized for repurchase under the company's share repurchase program. Under that program, shares may be purchased in the open market from time to time at the discretion of Altera's management. 
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