SAN FRANCISCO—Programmable logic vendor Altera Corp. Tuesday (July 20) said it set a new all-time high in quarterly sales in the second quarter, the second consecutive quarter in which the company has reported record revenue.
Altera (San Jose, Calif.) beat consensus analyst expectations for sales and net income during the second quarter. According to sales guidance provided by the company, Altera could post its first ever $500 million quarter in the third quarter.
Executives from Altera said they don't have direct evidence of inventory accumulation in the supply chain—an area that analysts have been concerned about—but said its guidance assumes that there is some accumulation taking place.
"This is the semiconductor industry, and we have seen in past cycles that some customers may choose to put buffer stock in place or order more than they really need," said John Daane, Altera's president, chairman and CEO.
Daane said Altera has not heard any direct evidence of inventory build up, but added that Altera has more than 10,000 customers and only calls on a couple hundred of them directly.
Lead times for some Altera parts have grown to extended levels, Daane said, noting tight capacity by its foundry supplier, Taiwan Semiconductor Manufacturing Co. Ltd. (TSMC). Daane cautioned that those parts with longer lead times are not just the company's newer products, including many older products as well. The company has no intention of deviating from its single-foundry strategy, which Altera believes offer it certain advantages in its relationship with TSMC, Daane said.
Altera reported second quarter revenue of $469.3 million, an increase of 17 percent compared with the previous quarter and up 68 percent compared to the second quarter of 2009. The company's second quarter net income was $180.6 million, or 58 cents per diluted share, up from $153.2 million in the previous quarter and up from $47.4 million in the year-ago quarter.
Analysts had predicted, on average, second quarter revenue of $447.2 million and earnings per share of 53 cents, according to Yahoo Finance.
Altera's new product sales increased 36 percent in the second quarter compared to the first quarter, the company said. Daane said sales of 65-nm FPGAs were up sharply and that 40-nm products grew even faster "as they transition into the production-demand phase of their life."
Altera's second quarter sales improved sequentially throughout all regions and across all product lines, according to Altera.
The telecomm and wireless market segment accounted for 42 percent of Altera's second quarter sales, up from 40 percent in the previous quarter but down from 48 percent in the year-ago quarter, the company said.
For the third quarter, Altera said it expects revenue to grow 4 to 8 percent sequentially, reach between $488 million and nearly $507 million.