http://www.morningstar.com/earnings/51399292-altera-corp-altr-q1-2013.aspx

Altera Corp. ALTR
Q1 2013 Earnings Call Transcript

Transcript Call Date 04/25/2013

Operator: Good day, everyone, and welcome to the Altera First Quarter 2013 Earnings Conference Call. As a reminder, this call is being recorded.

At this time, I would like to turn the call over to Mr. Scott Wylie, Vice President, Investor Relations. Please go ahead sir.

Scott Wylie - VP, IR: Good afternoon. Thank you for joining this conference call, which will be available for replay telephonically and on Altera's website shortly after we conclude this afternoon. To listen to the webcast replay, please visit Altera's Investor Relations' webpage where you will find complete instructions. A telephone replay will be available at 719-457-0820, and use code 258712.

During today's prepared remarks, we'll be making some forward-looking statements. In addition, management may make additional forward-looking statements in response to questions. In light of the Private Securities Litigation Reform Act, I would like to remind you that these statements must be considered in conjunction with the cautionary warnings that appear on our SEC filings.

Investors are cautioned that all forward-looking statements in this call involve risks and uncertainty, and that future events may differ from the statements made. For additional information, please refer to the Company's Securities and Exchange Commission filings, which are posted on our website or available from the Company without charge.

With me today are John Daane, our CEO; and Ron Pasek, Chief Financial Officer. Ron will open the call with a few brief remarks before turning the call over to John. After John concludes his remarks, we will take your questions. Prior to the Q&A session, the operator will be giving instructions on how you can access the conference call with your questions.

I would now like to turn the call over to, Ron.

Ronald J. Pasek - SVP, Finance and CFO: Thank you, Scott. Revenue and the gross margin rate for the quarter were essentially at the midpoint of guidance. On the top line we saw the greatest downward pressure in the telecom and wireless vertical. The remainder of the verticals were essentially flat.

28-nanometer revenue for the quarter grew over 38% sequentially. More importantly, our design-win rate for 28-nanometer remains at 60%.

On the OpEx line, R&D in Q1 was $12 million under guidance. The majority of this underrun is due to timing, meaning the spending will occur later in the year. The timing issue is not the result of any scheduled slippages. However, some of the argument is genuine cost savings. In fact this Q1 R&D cost savings more than offset the small dilution effect during FY '13 of our recent acquisition of TPACK.

I will give you an update on our next quarter's earnings call of any changes to the full year R&D OpEx. On the income tax line in addition to the catch up of the reinstated R&D tax credit. We also had a discrete item in the quarter. These two events together, created a $3 million tax benefit in Q1. Although book-to-bill for the quarter was slightly under 1, we did see an acceleration of orders in the month of March. This change in ordering has continued into April where we see the book-to-bill above 1 thus far through Q2.

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