Altera Announces First Quarter Results

SAN JOSE, Calif. -- Apr. 21, 2009 -- Altera Corporation (NASDAQ: ALTR) today announced first quarter sales of $264.6 million, down 16 percent from the fourth quarter of 2008 and down 21 percent from the first quarter of 2008. First quarter net income was $44.0 million, $0.15 per diluted share, down from net income of $83.0 million, $0.28 per diluted share, in the fourth quarter of 2008 and $83.9 million, $0.27 per diluted share, in the first quarter of 2008.

First quarter 2009 results include a previously announced $5.2 million pretax restructuring charge. The company's first quarter 2009 tax expense also includes $2.0 million related to a recently enacted change in California tax law. The combined after-tax impact of these two items was $0.02 per diluted share.

First quarter cash flow from operating activities was $44.0 million. Altera ended the quarter with $1.2 billion in cash and short-term investments.

Altera’s board of directors has declared a quarterly cash dividend of $0.05 per share payable on June 1, 2009 to stockholders of record on May 11, 2009.

"The first quarter business environment was better than we originally anticipated yet overall remains quite challenging. With double digit sequential growth, sales to wireless equipment customers, including those targeting new 3G deployments in China, were a bright spot in the quarter," said John Daane, president, chief executive officer, and chairman of the board. "Our 40-nm FPGA sales are growing quickly, creating the fastest new product ramp in our history. The product roll out has been on schedule, reinforcing our first mover process advantage as well as providing customers access to the industry's highest density FPGAs and most advanced transceiver functionality."

Several recent accomplishments mark the company’s continuing progress.

• Altera reached another milestone in the successful rollout of the 40-nm Stratix® IV GX FPGA family with initial shipments of the EP4SGX530. This new device is the industry's largest FPGA — more than 60% larger than any other FPGA on the market. This device is the next member of the Stratix IV GX family to ship following the initial shipment of the industry's first 40-nm FPGA, the EP4SGX230, in December 2008. The Stratix IV GX family combines advanced transceiver and FPGA technology targeting numerous applications in the communications, broadcast, test, medical, and military markets.

•  Altera further expanded its transceiver FPGA portfolio with the announcement of two additional FPGA families with integrated transceivers. The highest performing FPGAs available, Stratix IV GT devices are also the industry's first FPGAs to include integrated transceivers operating at 11.3 Gbps. This architecture is optimized specifically for 40G and 100G applications such as communications systems, high-end test equipment, and military communications systems. In addition, Altera announced the Arria® II GX family, the lowest power 3.75-Gbps transceiver FPGAs available. With a cost-optimized structure, Arria II GX FPGAs are well suited for wireless infrastructure equipment, wire line access and networking applications, as well as broadcast and other video processing equipment. Stratix IV GT devices began shipping in February, and the first Arria II GX devices will ship in the second quarter of 2009.

• Altera's 40-nm FPGAs received significant recognition at the 19th annual EDN Innovation Awards ceremony where Stratix IV FPGAs won the "Innovation of the Year Award" in the programmable logic category. In addition, the Stratix IV design team also took top honors, receiving the "Innovator of the Year" award for their innovation in product design and technical leadership. The EDN Innovation Awards honor outstanding products in the electronics industry. EDN uses a combination of balloting by the EDN Advisory Board and voting by EDN's editorial staff and EDN's readership to determine the ultimate winners.

•  Altera's 40-nm Stratix IV FPGAs received the Electronic Products China Product of the Year Award. The Electronic Products China Product of the Year award is given to products that show significant progress in technology, innovative design, or offer distinct price/performance improvements compared with competing devices. The Stratix IV family has now received eight industry awards since May 2008 when the family was initially announced and the supporting Quartus® II development software was released.

Business Outlook for the Second Quarter 2009

Sequential Sales Growth	2% to 7%
Gross Margin	64.5% +/– .5%
Research and Development	$67 to $69 million
SG&A	$56 to $58 million
Other Income	approximately $1 million
Tax Rate	14% to 15%

Financial tables

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Conference Call and Quarterly Update:

A conference call will be held today at 1:45 p.m. Pacific Time to discuss the quarter's results and management's current business outlook. The webcast and subsequent replay will be available in the Investor Relations section of the company's website at www.altera.com. A telephonic replay of the call may be accessed later in the day by calling (719) 457-0820 and referencing confirmation code 258712. The telephonic replay will be available for two weeks following the live call.

Altera’s second quarter business update will be issued in a press release available after the market close on June 1, 2009.

About Altera

Altera programmable solutions enable system and semiconductor companies to rapidly and cost-effectively innovate, differentiate and win in their markets. Find out more about Altera’s FPGA, CPLD and ASIC devices at www.altera.com.

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