To: Johnny Canuck who wrote (41246 ) 6/2/2004 10:57:46 AM From: Johnny Canuck Read Replies (1) | Respond to 07:16 ALTR Altera: Color On Guidance Call (22.83 ) Altera's 2Q04 is tracking slightly ahead of its guidance driven by strength from the consumer/industrial end market (47% of 1Q04 revenue) and share gains at EMC. In addition, they believe Altera continues to benefit from strength in the consumer and industrial end markets with strong sales of its Cyclone product line (5% of 1Q04 revenue). Firm remains concerned with the large inventory buildup in the communications supply chain. They estimate that total inventory days in the wireline supply chain increased 24 days QoQ from 86 days in 4Q03 to 110 days in 1Q04, above the normalized level of 85 days. Firm's rating remains Neutral... Goldman maintaining their Q2E for ALTR of $262.9M (up 8.2% Q/Q)/EPS $0.17, but expects estimates remain biased to the upside. In addition, they remain optimistic regarding business momentum for the broader PLD industry and expect XLNX will also post a solid mid-quarter update... Prudential notes that the co's QoQ rev growth guidance is ahead of PLD competitors, XLNX (+5-8%) and LSCC (+3-5%). ALTR's typical Jun Q seasonal growth is +5% QoQ. Firm is raising their estimates: new GAAP EPS estimates for the Jun-04 Q, CY04 and CY05 are $0.18, $0.68 and $0.85 from $0.16, $0.64 and $0.81, respectively. Tgt goes to $25 from $24 with rating at Neutral Weight... Finally, BofA out saying that the update likely to be viewed as a mild disappointment, given higher expectations heading into the report. That said, they think business trends at Altera remain strong and that there will likely be some additional upside to the updated guidance when the company reports results mid-July. [Harry: Increase in DSO would indicate more foreign customers on the surface or sales to less credit worthy customers. The first is not necessarily bad the second is]
