CHANNELS

Subscribe to the InfoTech eNewsletter

infoTECH News

TMCNet:  Altera Announces Fourth Quarter Results

[January 23, 2013]

Altera Announces Fourth Quarter Results

SAN JOSE, Calif., Jan. 23, 2013 /PRNewswire via COMTEX/ -- Altera Corporation (NASDAQ: ALTR) today announced fourth quarter sales of $439.4 million, down 11 percent from the third quarter of 2012 and down 4 percent from the fourth quarter of 2011. Fourth quarter net income was $120.8 million, $0.37 per diluted share, compared with net income of $157.5 million, $0.49 per diluted share, in the third quarter of 2012 and $146.6 million, $0.45 per diluted share, in the fourth quarter of 2011.

(Logo: http://photos.prnewswire.com/prnh/20101012/SF78952LOGO) Cash flow from operating activities in 2012 was $587.2 million. Altera repurchased 1.6 million shares of its common stock during the quarter at a cost of $50.0 million. Altera ended the quarter with $3.7 billion in cash and investments.

Altera's board of directors has declared a quarterly cash dividend of $0.10 per share payable on March 1, 2013 to stockholders of record on February 11, 2013.

"While our new products had a double-digit sequential growth quarter, sales of our older products were soft--the result of a sluggish global economy," said John Daane, president, chief executive officer, and chairman of the board. "Sales of 40 nm devices, our largest selling process node, and where we are the market leader, are likely to strengthen further as we progress through 2013. At the most advanced process node, 28 nm, Altera remains the design-win value leader, giving us a substantial growth opportunity as these customer designs transition into production." Several recent accomplishments mark the company's continuing progress: -- Huawei Technologies, a leading global information and communications technology solutions provider, has presented Altera with its 2012 Excellent Core Partner Award. In making this award, Huawei specifically recognized Altera for its excellence in terms of quality, delivery of leading-edge technologies and services. The Excellent Core Partner Award is the highest recognition Huawei gives to its suppliers. Altera is among an elite set of suppliers to earn this award for outstanding contribution toward Huawei's business success throughout 2012. In 2012, Huawei realized the performance advantage offered by Altera's 28 nm Stratix® V FPGAs and selected the high-end product family for use in the company's 400G high-capacity OTN system. By using the industry's first high-end 28 nm production FPGAs, Huawei enabled the evolution of communications infrastructure such as 400G systems and other high-performance systems in a variety of markets throughout the world.

-- Altera also received the 2012 Global Excellent Partnership Award from ZTE Corporation, a leading provider of telecommunications equipment and network solutions. The award recognizes Altera for overall performance in delivering best-in-class products and services to ZTE during the past year. According to ZTE, innovative programmable solutions and technical support from Altera played a critical role in supporting product development for the company's existing and next-generation communication products. ZTE presents its Global Excellent Partnership Award each year to suppliers meeting rigorous performance criteria. Winners are chosen based on partner satisfaction surveys among company staff, including development and material engineers and purchasing employees. Suppliers are evaluated on cost efficiencies, on-time delivery, quality standards and service records. Altera scored the highest marks in all categories.

-- Altera is now shipping the first of its 28 nm SoC devices, which combine a dual-core ARM® Cortex(TM)-A9 processor system with FPGA logic on a single device. The initial devices to ship are the low-power, low-cost Cyclone® V SoCs. Altera SoCs include several distinctive features that enable developers in the wireless communications, industrial, video surveillance, automotive and medical equipment markets to create custom SoC variants optimized for system power, board space, performance and cost requirements. In addition, Altera is the only FPGA vendor today shipping SoCs that offer 32-bit error correction code (ECC) support which helps ensure data integrity throughout the embedded system. ECC support is a requirement for customers who must have high-performance and reliable systems. With silicon now available, customers who used Altera's SoC Virtual Target to develop their application software can now quickly port their application software into the SoC, saving months of development time. Further strengthening the SoC device tools ecosystem support, Altera and ARM have jointly developed the ARM Development Studio 5(TM) Altera Edition (DS-5(TM)) toolkit with FPGA-adaptive debugging, which exclusively supports Altera SoC devices. The DS-5 toolkit is designed to remove the debugging barrier between the integrated dual-core CPU subsystem and the FPGA fabric in Altera SoC devices, providing embedded software developers an unprecedented level of full-chip visibility and control.

-- Altera has developed the FPGA industry's first Software Development Kit (SDK) for OpenCL(TM) (Open Computing Language) which combines the massively parallel architecture of an FPGA with the OpenCL parallel programming model. OpenCL is an open, royalty-free standard for cross-platform, parallel programming of hardware accelerators, including CPUs, GPGPUs and FPGAs. The semiconductor industry's approach for boosting system performance has evolved from increasing frequency in single-core CPUs, to using multi-core CPUs, to using parallel processor arrays. Today, system designers are turning to FPGAs, which are fine-grained, massively parallel digital logic arrays architected to execute computations in parallel to create higher performance levels at a fraction of the power compared to other hardware alternatives. By allowing system developers and programmers familiar with C to quickly and easily develop high-performance, power-efficient FPGA-based applications in a high-level language, Altera's SDK for OpenCL enables customers to easily adopt FPGAs and leverage the performance and power benefits the devices provide. This unified, high-level design flow for hardware and software development automates the time-consuming tasks required in typical hardware-design language flows, and the resulting FPGA-based solution can deliver more than 5X performance/watt compared to alternative hardware implementations.

SELECTED FOURTH QUARTER REVENUE AND RELATED RESULTS Key New Product Devices Sequential Comparisons Stratix V (9)% Arria V 152% Stratix IV 19% Arria II (6)% Cyclone IV 21% HardCopy IV (15)% Vertical Markets Sequential Comparisons Comments Telecom & Wireless (12)% Both Telecom and Wireless down Industrial Automation, (9)% Broadly down Military & Automotive Networking, Computer & Storage (12)% Networking down and Computer and Storage up Other (10)% - ($ in thousands) December 31, 2012 September 30, 2012 Key Ratios & Information Current Ratio 7:1 6:1 Liabilities/Equity 1:3 1:2 Quarterly Operating Cash Flows $ 126,709 $ 285,203 TTM Return on Equity 18% 19% Quarterly Depreciation Expense $ 9,170 $ 9,677 Quarterly Capital Expenditures $ 7,201 $ 17,749 Inventory MSOH (1): Altera 3.4 3.1 Inventory MSOH (1): Distribution 0.6 0.6 TTM Cash Conversion Cycle (Days) 117 140 Turns 40% 37% 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 Years Ended December 31, 2012 September 28, 2012 December 31, 2011 Sequential Change Year- December 31, 2012 December 31, 2011 Annual Growth Over-Year Change Geography Americas 19 % 19 % 21 % (8) % (12) % 18 % 19 % (18) % Asia Pacific 39 % 43 % 40 % (21) % (7) % 43 % 41 % (9) % EMEA 28 % 25 % 22 % (2) % 20 % 25 % 25 % (15) % Japan 14 % 13 % 17 % (4) % (19) % 14 % 15 % (18) % Net Sales 100 % 100 % 100 % (11) % (4) % 100 % 100 % (14) % Product Category New 39 % 31 % 27 % 11 % 39 % 32 % 22 % 22 % Mainstream 28 % 32 % 33 % (20) % (18) % 30 % 34 % (22) % Mature and Other 33 % 37 % 40 % (22) % (21) % 38 % 44 % (26) % Net Sales 100 % 100 % 100 % (11) % (4) % 100 % 100 % (14) % Vertical Market Telecom & Wireless 44 % 45 % 43 % (12) % 0 % 44 % 43 % (12) % Industrial Automation, Military & Automotive 21 % 20 % 24 % (9) % (17) % 21 % 23 % (22) % Networking, Computer & Storage 17 % 17 % 16 % (12) % 0 % 17 % 17 % (11) % Other 18 % 18 % 17 % (10) % 1 % 18 % 17 % (10) % Net Sales 100 % 100 % 100 % (11) % (4) % 100 % 100 % (14) % FPGAs and CPLDs FPGA 84 % 82 % 82 % (9) % (2) % 84 % 81 % (11) % CPLD 9 % 9 % 9 % (12) % (12) % 9 % 10 % (22) % Other Products 7 % 9 % 9 % (29) % (19) % 7 % 9 % (27) % Net Sales 100 % 100 % 100 % (11) % (4) % 100 % 100 % (14) % Product Category Description -- New Products include the Stratix® V, Stratix IV, Arria® V, Arria II, Cyclone® V, Cyclone IV, MAX® V and HardCopy® IV devices.

-- Mainstream Products include the Stratix III, Cyclone III, MAX II and HardCopy III devices.

-- Mature and Other Products include the Stratix II, Stratix, Arria GX, Cyclone II, Cyclone, Classic(TM), MAX 3000A, MAX 7000, MAX 7000A, MAX 7000B, MAX 7000S, MAX 9000, HardCopy II, HardCopy, FLEX® series, APEX(TM) series, Mercury(TM), Excalibur(TM) devices, configuration and other devices, intellectual property cores, and software and other tools.

Business Outlook for the First Quarter 2013 Sales and Income Statement Sequential Sales Growth Down 4% to 8% Gross Margin 69% to 70% Research and Development $99 to 101 million SG&A $77 to 78 million Tax Rate 4% to 5% Diluted Share Count Approximately 323 million Turns Mid-40's Inventory MSOH Approximately 4.0 Vertical Market Telecom & Wireless Wireless down Industrial Automation, Military & Automotive Up slightly Networking, Computer & Storage Down slightly Other Up slightly Fourth Quarter Earnings Conference Call A conference call will be held today at 1:45 p.m. Pacific Time to discuss the quarter's results and management's current business outlook. The web cast and subsequent replay will be available in the Investor Relations section of the company's website at www.altera.com. A telephonic replay of the call may be accessed later in the day by calling (719) 457-0820 and referencing confirmation code 258712. The telephonic replay will be available for two weeks following the live call.

Forward-Looking Statements Statements in this press release that are not historical are "forward-looking statements" as the term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally written in the future tense and/or preceded by words such as "will," "expects," "anticipates," or other words that imply or predict a future state. Forward-looking statements include, but are not limited to, statements regarding our competitive position at 40 nm, our expectation of stronger sales at 40 nm in 2013, our expectation of expansion in 28 nm FPGA opportunities, and our competitive position at 28 nm, as well as any projection of revenue, gross margin, expense or other financial items discussed in the Business Outlook section or elsewhere in this press release. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty that can cause actual results to differ from those currently anticipated, due to a number of factors, including without limitation, current global economic conditions, customer business environment, customer inventory levels, vertical market mix, market acceptance of the company's products, product introduction schedules, the rate of growth of the company's new products including Cyclone® V, Cyclone IV, Arria® V, Arria II, Stratix® V, Stratix IV FPGAs, MAX® V CPLDs and HardCopy® IV device families, as well as changes in economic conditions and other risk factors discussed in documents filed by the company with the Securities and Exchange Commission (SEC) from time to time. Copies of Altera's SEC filings are posted on the company's website and are available from the company without charge. Forward-looking statements are made as of the date of this release, and, except as required by law, the company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.

About Altera Altera programmable solutions enable system and semiconductor companies to rapidly and cost-effectively innovate, differentiate and win in their markets. Find out more about Altera's FPGA, CPLD and ASIC devices at www.altera.com. Follow Altera via Facebook, RSS and Twitter.

ALTERA, ARRIA, CYCLONE, HARDCOPY, MAX, MEGACORE, NIOS, QUARTUS and STRATIX words and logos are trademarks of Altera Corporation and registered in the U.S. Patent and Trademark Office and in other countries. All other words and logos identified as trademarks or service marks are the property of their respective holders as described at www.altera.com/legal.

INVESTOR CONTACT MEDIA CONTACT Scott Wylie - Vice President Sue Martenson - Senior Manager Investor Relations Public Relations (408) 544-6996 (408) 544-8158 swylie@altera.com newsroom@altera.com ALTERA CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (Unaudited) Three Months Ended Years Ended (In thousands, except per share amounts) December 31, 2012 September 28, 2012 December 31, 2011 December 31, December 31, 2012 2011 Net sales $ 439,440 $ 495,010 $ 457,804 $ 1,783,035 $ 2,064,475 Cost of sales 133,367 152,007 136,764 541,523 610,329 Gross margin 306,073 343,003 321,040 1,241,512 1,454,146 Operating expense Research and development expense 94,162 91,606 90,295 360,421 325,733 Selling, general, and administrative expense 74,030 74,243 70,667 289,854 279,217 Total operating expense 168,192 165,849 160,962 650,275 604,950 Operating margin (1) 137,881 177,154 160,078 591,237 849,196 Compensation expense (benefit) - deferred compensation plan 358 3,274 2,962 7,055 (1,964) (Gain) loss on deferred compensation plan securities (358) (3,274) (2,962) (7,055) 1,964 Interest income and other (2,390) (2,775) (1,039) (8,388) (3,544) (Gain)/loss reclassified from other comprehensive income (205) 108 18 (268) 18 Interest expense 2,589 2,333 1,013 7,976 3,730 Income before income taxes 137,887 177,488 160,086 591,917 848,992 Income tax expense 17,082 19,999 13,475 35,110 78,281 Net income $ 120,805 $ 157,489 $ 146,611 $ 556,807 $ 770,711 Other comprehensive (loss) income: Unrealized (loss)/gain on investments: Unrealized holding (loss)/gain on investments arising during period, net of tax of ($11), $43, $8, $114 and ($17) (889) 3,620 41 5,839 (149) Less: Reclassification adjustments for (gain)/loss on investments included in net income, net of tax of $24, $1, ($2), $25 and ($2) (44) (41) 16 (114) 16 (933) 3,579 57 5,725 (133) Unrealized (loss)/gain on derivatives: Unrealized gain/(loss) on derivatives arising during period, net of tax of $9, ($6) and $45 17 (10) -- 84 -- Less: Reclassification adjustments for (gain)/loss on derivatives included in net income, net of tax of $48, ($53) and $45 (89) 97 -- (84) -- (72) 87 -- -- -- Other comprehensive (loss) income: (1,005) 3,666 57 5,725 (133) Comprehensive income $ 119,800 $ 161,155 $ 146,668 $ 562,532 $ 770,578 Net income per share: Basic $ 0.38 $ 0.49 $ 0.46 $ 1.74 $ 2.39 Diluted $ 0.37 $ 0.49 $ 0.45 $ 1.72 $ 2.35 Shares used in computing per share amounts: Basic 319,765 319,870 321,553 320,830 321,892 Diluted 322,209 323,560 325,653 324,497 327,606 Cash dividends per common share $ 0.10 $ 0.10 $ 0.08 $ 0.36 $ 0.28 Tax rate 12.4 % 11.3 % 8.4 % 5.9 % 9.2 % % of Net sales: Gross margin 69.7 % 69.3 % 70.1 % 69.6 % 70.4 % Research and development 21.4 % 18.5 % 19.7 % 20.2 % 15.8 % Selling, general, and administrative 16.8 % 15.0 % 15.4 % 16.3 % 13.5 % Operating margin(1) 31.4 % 35.8 % 35.0 % 33.2 % 41.1 % Net income 27.5 % 31.8 % 32.0 % 31.2 % 37.3 % Notes: (1)We define operating margin as gross margin less research and development and selling, general and administrative expenses, as presented above. This presentation differs from income from operations as defined by U.S. Generally Accepted Accounting Principles ("GAAP"), as it excludes the effect of compensation associated with the deferred compensation plan obligations. Since the effect of compensation associated with our deferred compensation plan obligations is offset by gains and losses from related securities, we believe this presentation provides a more meaningful representation of our ongoing operating performance. A reconciliation of operating margin to income from operations follows: Three Months Ended Years Ended (In thousands) December 31, 2012 September 30, 2012 December 31, 2011 December 31, December 31, 2012 2011 Operating margin (non-GAAP) $ 137,881 $ 177,154 $ 160,078 $ 591,237 $ 849,196 Compensation expense (benefit) -- deferred compensation plan 358 3,274 2,962 7,055 (1,964) Income from operations (GAAP) $ 137,523 $ 173,880 $ 157,116 $ 584,182 $ 851,160 ALTERA CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited) (In thousands, except par value amount) December 31, December 31, 2012 2011 Assets Current assets: Cash and cash equivalents $ 2,876,627 $ 3,371,933 Short-term investments 140,958 65,222 Total cash, cash equivalents, and short-term investments 3,017,585 3,437,155 Accounts receivable, net 323,708 232,273 Inventories 152,721 122,279 Deferred income taxes - current 59,049 58,415 Deferred compensation plan - marketable securities 60,321 54,041 Deferred compensation plan - restricted cash equivalents 17,116 17,938 Other current assets 49,852 52,710 Total current assets 3,680,352 3,974,811 Property and equipment, net 206,148 171,721 Long-term investments 704,758 74,033 Deferred income taxes - non-current 17,082 26,629 Other assets, net 49,488 35,074 Total assets $ 4,657,828 $ 4,282,268 Liabilities and stockholders' equity Current liabilities: Accounts payable $ 50,036 $ 52,154 Accrued liabilities 29,005 34,029 Accrued compensation and related liabilities 40,606 78,181 Deferred compensation plan obligations 77,437 71,979 Deferred income and allowances on sales to distributors 345,993 279,876 Credit facility -- 500,000 Total current liabilities 543,077 1,016,219 Income taxes payable - non-current 272,000 263,423 Long-term debt 500,000 -- Other non-current liabilities 9,304 8,730 Total liabilities 1,324,381 1,288,372 Commitments and contingencies Stockholders' equity: Common stock: $.001 par value; 1,000,000 shares authorized; outstanding - 319,564 at December 31, 2012 and 322,054 shares at December 31, 2011 320 322 Capital in excess of par value 1,122,555 1,050,752 Accumulated other comprehensive income (loss) 5,592 (133) Retained earnings 2,204,980 1,942,955 Total stockholders' equity 3,333,447 2,993,896 Total liabilities and stockholders' equity $ 4,657,828 $ 4,282,268 ALTERA CORPORATION CONSOLIDATED STATEMENTS OF CASH FLOWS (Unaudited) YEARS ENDED (In thousands) December 31, December 31, December 31, 2012 2011 2010 Cash Flows from Operating Activities: Net income $ 556,807 $ 770,711 $ 782,884 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation and amortization 36,862 31,927 27,535 Stock-based compensation 93,586 82,750 62,118 Deferred income tax expense 8,824 15,657 34,256 Tax effect of employee stock plans 9,811 16,162 27,444 Excess tax benefit from employee stock plans (16,278) (17,307) (21,866) Changes in assets and liabilities, net of the effects of acquisition: Accounts receivable, net (91,435) 131,341 (145,330) Inventories (30,442) 24,245 (76,819) Other assets (3,050) 54,661 (52,805) Accounts payable and other liabilities (50,566) (32,534) 59,200 Deferred income and allowances on sales to distributors 66,117 (148,836) 146,826 Income taxes payable 8,576 31,116 15,746 Deferred compensation plan obligations (1,598) (293) (2,494) Net cash provided by operating activities 587,214 959,600 856,695 Cash Flows from Investing Activities: Purchases of property and equipment (60,913) (31,812) (12,442) Proceeds from sales of deferred compensation plan securities, net 1,598 293 2,494 Purchases of available-for-sale securities (921,430) (164,408) -- Proceeds from sale and maturity of available-for-sale securities 220,784 25,003 -- Acquisition related payments, net of cash acquired -- -- (8,004) Purchases of intangible assets (2,280) -- (5,000) Purchase of other investments (4,935) -- -- Net cash used in investing activities (767,176) (170,924) (22,952) Cash Flows from Financing Activities: Proceeds from issuance of common stock through various stock plans 49,665 119,989 453,719 Shares withheld for employee taxes (31,472) (32,152) (20,164) Payment of dividends to stockholders (115,514) (90,060) (67,774) Proceeds from issuance of long-term debt 500,000 -- -- Repayment of credit facility (500,000) -- -- Long-term debt and credit facility issuance costs (5,244) -- -- Repurchases of common stock (229,057) (197,023) -- Excess tax benefit from employee stock plans 16,278 17,307 21,866 Principal payments on capital lease obligation -- -- (2,866) Net cash (used in) provided by financing activities (315,344) (181,939) 384,781 Net (decrease) increase in cash and cash equivalents (495,306) 606,737 1,218,524 Cash and cash equivalents at beginning of period 3,371,933 2,765,196 1,546,672 Cash and cash equivalents at end of period $ 2,876,627 $ 3,371,933 $ 2,765,196 Supplemental cash flow information: Income taxes paid, net $ 9,797 $ 9,856 $ 29,887 Interest paid $ 6,898 $ 3,704 $ 3,395 SOURCE Altera Corporation

[ InfoTech Spotlight's Homepage ]


blog comments powered by Disqus

FOLLOW US

Subscribe to InfoTECH Spotlight eNews

InfoTECH Spotlight eNews delivers the latest news impacting technology in the IT industry each week. Sign up to receive FREE breaking news today!
FREE eNewsletter