Altera

Altera's (ALTR) return on equity (ROE) of 35% crushes the industry average of 4%. The company is yielding 1%, which compares favorably to its peers as Altera is operating in an industry that offers very little in the way of dividends.

Company Description

Altera provides programmable logic devices (PLD), application-specific integrated circuits (ASIC), pre-defined design building blocks, and associated development tools. The company serves customers primarily in the communications, computer and storage, consumer, and industrial sectors. ALTR markets its products through a network of distributors, independent sales representatives, and direct sales personnel. It has operations primarily in North America, the Asia Pacific, Europe, and Japan.

ALTR Backed Guidance

The company recently reaffirmed that it expects third quarter sales to be flat to 3% lower than that of the year-prior. Altera added that it will announce third quarter results after market close on October 14, 2008.

Growth in the Second Quarter

Altera reported its second-quarter results in mid-July. Earnings per share of 32 cents topped the consensus estimate by 18.5% and outpaced the year-ago total.

"The second quarter exceeded our expectations for growth and profitability. Our 90-nm FPGAs were the largest growth drivers and 65-nm FPGA sales more than doubled sequentially, leading to FPGA growth of 18 percent year over year. The combination of solid top line growth, continued gross margin improvement, and lower than planned operating expense created significant operating leverage and a very strong operating margin," said John Daane, president, chief executive officer, and chairman of the board.

Favorable Industry Comparisons

ALTR’s return on equity (ROE) of 35% crushes the industry average of 4%. The company is yielding 1%, which compares favorably to its peers as Altera is operating in an industry that offers very little in the way of dividends.

Estimates are Up

For the current and following years, the consensus earnings per share estimates stand at $1.19 and $1.30, respectively. Two months ago, analyst forecasts called for 2008 earnings of $1.07 per share and 2009 earnings of $1.26 per share.

Read the full analyst report on ALTR