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Altera Announces Second Quarter Results; Raises Dividend

July 24, 2014

SAN JOSE, Calif., July 24, 2014 /PRNewswire/ — Altera Corporation (NASDAQ: ALTR) today announced second quarter sales of $491.5 million, up 7 percent from the first quarter of 2014 and up 17 percent from the second quarter of 2013. Second quarter net income was $127.0 million, $0.41 per diluted share, compared with net income of $116.5 million, $0.37 per diluted share, in the first quarter of 2014 and $101.5 million, $0.31 per diluted share, in the second quarter of 2013.

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Year-to-date cash flow from operating activities was $301.4 million. Altera repurchased approximately 6.0 million shares during the quarter at a cost of approximately $197.0 million.

Altera’s board of directors has declared a quarterly cash dividend of $0.18 per share, to be paid on September 2, 2014 to shareholders of record on August 11, 2014. The company’s previous quarterly cash dividend had been $0.15 per share.

“Revenue growth was stronger than expected with new products up double digits sequentially. New product growth reflects very good 28 nm FPGA performance as well as continued solid growth from our 40 nm products,” said John Daane, president, chief executive officer, and chairman of the board. “With new capabilities and vastly improved performance compared with our prior-generation midrange offerings, our 20 nm Arria 10 FPGAs and SoCs are displaying solid competitive potential as we are seeing a record level of identified customer opportunities. Further, at the high end, with continuing development of our Intel-sourced 14 nm FinFET-based Stratix 10 FPGAs, it remains clear that this new technology coupled with our HyperFlex architecture will deliver industry-leading density and performance as well as lower power and cost.”

Recent accomplishments mark the company’s continuing progress:

    --  Early access customers are successfully achieving the anticipated 2X
        core performance gain in their Stratix(® )10 FPGA and SOC designs
        compared to previous generation high-performance programmable devices.
        This breakthrough leap in FPGA core performance is a result of Intel's
        14 nm Tri-Gate process technology and the groundbreaking Stratix 10
        HyperFlex(TM) architecture. Through the Stratix 10 FPGA early access
        program, Altera is working with several customers to run their existing
        designs through performance evaluation tools built for Stratix 10 FPGAs.
        The customer designs target a wide range of applications and leverage a
        variety of hardware design approaches, including ASIC replacement
        designs, traditional high-performance FPGA communication designs and
        high-throughput data center and computation designs.

    --  Altera continues to work with several partners and customers on
        software-defined data centers and server acceleration, including
        Microsoft Corporation, who is seeking to accelerate portions of
        Microsoft's Bing web search engine. Based on the results of this
        collaboration, Bing plans to roll out Altera FPGA-accelerated servers to
        process customer searches in one of its data centers starting in early
        2015. Altera's FPGAs accelerate the processing of large amounts of data
        on servers, which helps address big data challenges and massive
        distributed workloads.  Altera's view of the software defined data
        center is that FPGAs are helping drive the transformation of the modern
        data center with a virtualized infrastructure delivered as a service
        using commodity servers. In this environment, FPGAs can deliver
        performance advantages, in some cases orders of magnitude improvements,
        with significantly lower power consumption than alternative approaches.
        A data center with reconfigurable fabric enabled by Altera FPGAs
        provides greater business agility, and its complexity can be managed as
        it scales.


                           SELECTED SECOND QUARTER REVENUE AND RELATED RESULTS

    ($ in thousands)                                  June 27, 2014                March 28, 2014

    Key Ratios &
     Information
    ------------

    Current Ratio                                               6:1                           6:1

    Liabilities/Equity                                          2:3                           2:3

    Quarterly Operating
     Cash Flows                                                           $170,958                 $130,430

    TTM Return on Equity                                        13%                           13%

    Quarterly Depreciation
     Expense                                                               $12,222                  $12,996

    Quarterly Capital
     Expenditures                                                           $9,620                   $7,116

    Inventory MSOH (1):
     Altera                                                     3.2                            3.1

    Inventory MSOH (1):
     Distribution                                               0.6                            0.6

    Cash Conversion Cycle
     (Days)                                                     160                            157

    Turns                                                       42%                           48%

    Book to Bill                                               >1.0                          >1.0

    Note (1): MSOH: Months
     Supply On Hand


                                                          ALTERA CORPORATION

                                                          NET SALES SUMMARY

                                                             (Unaudited)

                              Three Months Ended                             Quarterly Growth Rate
                              ------------------                             ---------------------

                     June 27,                  March 28,          June 28,                Sequential
                       2014                        2014               2013                     Change         Year-

                                                                                                       Over-Year

                                                                                                         Change
                                                                                                           ------

    Geography
    ---------

    Americas              16%                             15%                                    17%                  8%    9%

    Asia Pacific          43%                             43%                                    39%                  8%   28%

    EMEA                  27%                             26%                                    28%                  9%   13%

    Japan                 14%                             16%                                    16%                (2)%    3%
                          ---                              ---                                     ---

    Net Sales            100%                            100%                                   100%                  7%   17%
                          ===                              ===                                     ===

    Product Category
    ----------------

    New                   53%                             49%                                    41%                 15%   53%

    Mainstream            21%                             23%                                    28%                  2% (11)%

    Mature and Other      26%                             28%                                    31%                (4)%  (5)%
                          ---                              ---                                     ---

    Net Sales            100%                            100%                                   100%                  7%   17%
                          ===                              ===                                     ===

    Vertical Market
    ---------------

    Telecom &
     Wireless             46%                             45%                                    42%                  9%   28%

    Industrial
     Automation,
     Military &
     Automotive           21%                             22%                                    22%                  3%   14%

    Networking,
     Computer &
     Storage              15%                             15%                                    18%                  1%  (6)%

    Other                 18%                             18%                                    18%                 10%   16%
                          ---                              ---                                     ---

    Net Sales            100%                            100%                                   100%                  7%   17%
                          ===                              ===                                     ===

    FPGAs and CPLDs
    ---------------

    FPGA                  84%                             83%                                    83%                  8%   18%

    CPLD                   8%                              9%                                     9%                  0%    7%

    Other Products         8%                              8%                                     8%                  3%   12%
                          ---                              ---                                     ---

    Net Sales            100%                            100%                                   100%                  7%   17%
                          ===                              ===                                     ===

Product Category Description


Source: PR Newswire



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