Altera (Nasdaq: ALTR) was at US$23.50, up 13 cents, in morning trading Tuesday, despite warning that a slowdown incustomer orders would cause a 20 percent drop in first-quarter revenuesending in March.
The latest lowered sales outlook from Altera was the third it hasissued since November. On January 30th, the company, which manufacturesprogrammable logic chips and integrated circuits, warned thatfirst-quarter sales would be about 5 percent lower.
Altera said that orders for its specialtysemiconductors have continued to decline due to a spending pullback bycommunications companies and service providers.
The San Jose, California-based company said that its networking, telecommunications and DSL businesses,mainly in North America, have taken the biggest hit, while itsnon-communications businesses have held up “reasonably well.”
“An industry-wide inventory correction began in the fourth quarter, and nowreduced end-market consumption is exacerbating the impact of thatcorrection,” Altera president and chief executive officer John Daane said.
According to Daane, the company believes “moderate sequential revenue growth will resume in the second half.”
Altera projected first-quarter revenue will be down about 20 percent fromthe fourth quarter’s $368 million. Company executives reportedly said thatfirst quarter earnings should be about 16 cents per share, well below the 22 cents per share estimated by First Call/Thomson Financial.
A year earlier, Altera had net income of $75.2 million, or 18 cents per share,on sales of $272.8 million.
Altera also projected its 2001 revenue will be 15 percent below last year’s$1.38 billion, while earnings should be about 59 cents per share. Analystssurveyed by First Call had expected earnings to be roughly 94 cents.
In a related development, analysts cut estimates on Xilinx (Nasdaq: XLNX), apeer company that often trades in concert with Altera.