Altera (ALTR, Financial) posted results that were not too bad. The programmable chip producer turned out with great numbers, topping analysts' estimates on earnings and revenue. Further, in line with great results, Altera is expecting better results later on.
Business picking up energy
Altera's chip business is doing great. As a result, the organization's revenue rose by a decent 12% on a year over year basis to $461 million. The EPS came in at $0.37 per share, beating analysts' estimates. The analysts were displaying $438 million and $0.32 per share for top line and earnings. The great results by the organization show that it is infiltrating the chip industry by tapping profitable opportunities. Further, the great results impressed investors, and as a result, shares of Altera were up 4%.
The semiconductor industry is moving at a decent pace. It has immense opportunities for chipmakers. Altera is focused on accomplishing operational efficiencies and is focused on enhancing its services to increase more customer consideration. Further, Altera is expecting the telecom and wireless categories to develop. Then again, it is also expecting segments such as automobile, industrial and military to suffer weakness.
Some concerns and past
Altera is expecting wild results from China as deployments in China could be extensive and fast, which may lead the results to vacillate. However the chipmaker is certain as it is on the front foot with the LTE rollout in China, which might be a real development driver for the organization. On the global front, Altera has started seeing LTE picking up footing in Europe. The organization expects that it will start profiting in the recent 50% of the year.
In developing countries such as India, Altera is seeing the 3G business growing. Seeing these improvements in its business, Altera is anticipating that its wireless business will develop.
On the innovative front, Altera's cutting edge item portfolio is strong and is designing up well for further benefits. Some of its outstanding products such as Quatrus II software and Arria 10 with 20 nanometer chip are doing admirably. Getting up and go, Altera is also focusing on low-end segment. For that, the organization is well in line with presentation of its low-end MAX 10 item, whose presentation in the business isn't yet scheduled.
Intel partnership
Altera's biggest strength is in living up to expectations with Intel. Altera is working with Intel to join together separate components like processors, memory and programmable chips into customized devices in a method went for decreasing assembling costs and enhancing performance. Further, the news that Intel has broadened the consent to make chips for Altera is critical and can turn out to be a development driver for the organization.
Besides, Altera is also looking to enhance its profit margin by being cost powerful. For achieving this, Altera is wanting to slow its expense development later on permitting the earnings to develop faster than its top line. The chipmaker is sure of its outperformance later on and as a result, it has also posted a strong standpoint.
Conclusion
Altera has impressive prospects. The organization also looks reasonable with a trailing P/E of 24.24. The forward P/E of the organization is really respectable at 18.22. As the LTE stage is in early stages, Altera can end up being a decent investment later on. Subsequently, investors should most likely consider Altera for their portfolios.
