said that second-quarter expenses will come in several million dollars higher than expected, as the company grapples with the fallout over stock option practices that have drawn federal scrutiny.
In a midquarter update after the bell Tuesday, the San Jose, Calif., company stuck to its guidance of 7% to 10% sequential sales growth for its second quarter.
Altera, a maker of programmable logic chips, is one of several companies embroiled in a widening controversy over the so-called backdating of stock options -- a practice in which the exercise price or grant date of stock options is retroactively changed to increase the holder's profit.
The U.S. Department of Justice and the U.S.
Securities and Exchange Commission
are both looking into Altera's historical stock option practices. The company has formed a special committee made up of outside attorneys and accountants to investigate its stock-option accounting practices.
Meanwhile, the company has been
informed that it will be delisted from the
stock market as a result of its failure to file its first-quarter earnings report on time.
The company has delayed filing its earnings report with the SEC until its internal investigation is complete. Altera has said it will appeal its delisting in a hearing before a special Nasdaq panel in June.
The company said it expects "up to several million dollars" of additional SG&A expense in the second quarter as a result of the review of its stock option granting practices and related accounting.
In April, Altera had projected that its second-quarter SG&A spending would total $74 million.
According to Altera's guidance, sales in the current quarter will range between $313.4 million to $322 million, with strong demand for new products leading the growth.
The supply of some of these products, which include the Stratix II and HardCopy devices, are tight as a result of ongoing manufacturing constraints within the company.
Altera said it believes that the lead times for shipping these products to customers will return to normal within one to three months, which it said was in line with its previous estimates.
Analysts polled by Thomson First Call are looking for Altera to generate $317.5 million in second-quarter revenue with EPS of 21 cents.
Shares of Altera closed the regular session down 17 cents to $19.01; it lost 8 cents in recent extended trading.