Chipmaker Altera quarterly net beats Street

SAN FRANCISCO (Reuters) - Programmable chipmaker Altera Corp reported stronger than-expected quarterly net earnings and forecast sales would grow 3 percent to 6 percent in the current quarter from the previous one.

The company’s results and outlook come a week after heavyweight chipmaker Intel Corp boosted hopes for the beaten down technology sector when it said its sales could rise 3 percent in final quarter of 2010 from the quarter before.

Altera, which along with competitor Xilinx Inc dominates the programmable logic devices market, said third-quarter net income increased to $218 million, or 69 cents a share, from $57 million, or 19 cents a share, in the year-ago period.

That exceeded the average analyst estimate of 65 cents a share, according to Thomson Reuters I/B/E/S.

Altera said telecommunications and wireless demand helped drive earnings in the quarter and revenue was $528 million, in line with the Wall Street estimate of $526 million.

San Jose, California-based Altera’s stock rose 1.7 percent in after-hours trading after it closed down 0.46 percent at $29.50.

“The go-forward guidance is clearly better than everyone thought ... There’s a Q4 budget flush, demand for base stations in China is going to be strong through the end of the year,” said Auguste Richard, an analyst at Piper Jaffray.

Altera expects a gross margin of 70 percent to 71 percent in the current quarter, compared with 70 percent in the third quarter.

Reporting by Noel Randewich; editing by Steve Orlofsky and Andre Grenon