SAN FRANCISCO Shares of programmable logic supplier Altera Corp. dropped $1.30 more than 7 percent to close at $16.41 Tuesday (Oct. 25) after several analysts downgraded the company's stock. The closing price of $16.41 represents a new 52-week low for the company.
Altera (San Jose, Calif.) reported third quarter earnings Monday, posting sales of $291.5 million, up 2 percent from the second quarter of 2005 and up 10 percent from the third quarter of 2004.
Several analysts, including J.P. Morgan, reportedly cut Altera's rating from "buy" to "neutral" based on concerns over the company's fourth quarter and 2006 guidance, according to an Associated Press report.
Satya Chillara, an analyst for American Technology Research, maintained a "hold" rating on Altera following earnings. In a research note following the earnings announcement, Chillara did point out that the company reduced its guidance on 2006 gross margin from 65-67 percent to 64-66 percent. But Chillara also expressed confidence in Altera based on the fact that 48 percent of the company's third quarter revenue came from new products, including 35 percent of total revenue from 130-nanometer products.
According to the Nasdaq Web site, of 29 firms who follow Altera's stock, 16 currently maintain a "hold" rating, with seven analysts rating it a "strong buy," five analysts rating it "buy" and one analyst rating it "underperform."