SAN JOSE -- Altera Corp. here today announced that it is reducing its guidance for sequential revenue growth in the fourth quarter, ending Dec. 31.
The programmable logic supplier said it now expects fourth-quarter revenues to be nearly flat with sales in the third quarter. Altera posted sales of $395.4 million in the third quarter, a 16% increase from the previous three-month period and an 84% increase from revenues last year (see Oct. 16 story).
Altera downgraded its revenue outlook for the fourth quarter because November sales through distributors were less than management's previous expectations in all geographies. Low book-to-bill in distribution channels indicates December resales will also be lower than previously anticipated. November resales were lower than August, the corresponding period of last quarter, with almost all of the reduction occurring in North America, according to Altera.
On a quarter-to-date basis, overall resales are ahead of the first two months of last quarter but management expects that December resales will be lower than those of September, the company said.
"Throughout the last three weeks of November we have seen sluggish resales and low turns orders from end-customers," said Nathan Sarkisian, Altera's chief financial officer. "With the benefit of hindsight we believe we had customers participating in the DSL business that overbought in the first three quarters of the year, and are now pulling back.
"A more important factor, however, is the inventory accumulation at contract manufacturers," said the CFO. "Now that our lead-times are short and product availability is good across our entire product portfolio, contract manufacturers are taking the opportunity to reduce their own inventories, resulting in reduced resales."