on Tuesday became the latest technology company to predict doom and gloom for 2001,
saying it foresees an annual decline in revenue of 15% if there's "moderate" growth in the year's second half.
Altera executives disclosed during a conference call Tuesday after the market close that this quarter is shaping up to be a rough one for the maker of programmable logic devices, or PLDs. The company cut its projected revenue to $294 million in the first quarter, a decline of 20% from the fourth quarter. In mid-January, the company
said it expected revenue to fall by 5% in the first quarter from the fourth quarter and for revenue to grow 10% for the year.
Altera, which finished regular trading off $2.06, or 8.1%, to $23.38, was changing hands on
after hours at $22.35.
There were more disappointments. For the year, Altera sees earnings per share of 59 cents. That compares with analyst expectations for earnings of 94 cents this year, according to
First Call/Thomson Financial
The company said that the last few weeks of February deteriorated drastically as its customers cut back on new orders and shipments. About a month ago, Altera Chief Financial Officer Nathan Sarkisian had said there were indications that the company had turned a corner. Turns out it was just a temporary reprieve.
"Programs that have seen significant reductions include networking, telecom, and as we have mentioned before, our DSL
digital subscriber line business," Sarkisian said Tuesday.
Altera makes programmable logic devices, chips that companies can program themselves, and more than 60% of its revenue comes from the communications markets. And in the past few weeks, customers like
have issued weak forecasts for spending for the year. That decreased spending, as well as inventory build-up and a macroeconomic slowdown, conspired for a weak quarter.
The inventories that have dogged the company aren't going anywhere either. At the end of the quarter, the company expects to have eight months of inventory on hand. And how much inventory do its customers have on hand?
"Too much," Sarkisian said.