Altera's earnings fall year-over-year but manages to match estimates

Posted Jul 15th 2009 1:40PM by Mark Fightmaster
Filed under: Earnings Reports

After the closing bell tolled yesterday afternoon, chipmaker Altera (NASDAQ: ALTR) announced that its profit fell 52% in the second quarter. The chipmaker's profit was pushed lower thanks to falling sales and increasing taxes. During the quarter, ALTR saw net income decrease to 16 cents per share compared to last year's 32 cents per share. While the results fell short of those from a year ago, ALTR managed to match the consensus estimate of 16 cents per share. Revenue dropped to $279.2 million from $359.9 million a year ago - estimates called for $277.6 million in revenue. According to the company, a court ruling increased ALTR's tax costs by four cents per share. The court ruling stemmed from worldwide equity compensation cost sharing, and although the company wasn't involved in the case, it decided to increase its tax responsibilities.

The chipmaker saw sales of new products increase 16% in the second quarter. Looking ahead, ALTR forecast third-quarter earnings to drop 1% to 5% from the second-quarter results. Such a drop hints that revenue will come in at $265.2 million to $276.4 million. The top end of this range falls short of the Street's estimated $279.2 million.

ALTR was slightly higher in after-market trading, but it had barely penetrated the $17 region. With the equity's 50-week moving average falling through the $17 region, watch for the stock to struggle to go too much higher. The chipmaker has dropped from its 2007 high in the $26 region and is trying to use the $16 level as support. With tech looking to lead the way today, is it possible that ALTR can rally and fight through overhead resistance? Yes, it is possible - but be warned, the 50-week trendline has provided pretty stout resistance.

Tags: Altera, ALTR, chipmakers, earnings, inthenews, technology