Fri, May 1, 9:13 AM
Thu, Apr. 30, 4:32 PM
- Intel (NASDAQ:INTC) signed a standstill agreement with Altera (NASDAQ:ALTR) amid M&A talks, Reuters reports. However, the agreement is said to expire on June 1, after which Intel would be free to launch a hostile bid if it wishes. Sources state it's "unclear" whether Intel will make such a move (through a public tender offer) once the standstill expires.
- The news service adds Intel discussed a $58/share bid for Altera in February, but lowered its offer after signing an NDA and poring through Altera's books - Altera's Q1 results and Q2 guidance appear to explain Intel's thinking. Bloomberg previously reported of a $54/share offer.
- ALTR +5% AH to $43.78. Earlier this week, major Altera investor TIG Advisors demanded the FPGA maker resume Intel buyout talks.
- Prior Intel/Altera coverage
Mon, Apr. 27, 5:34 PM
- Arguing "stockholders should have right to choose between Intels reported $54 cash offer and [the] uncertain future of standalone Altera (NASDAQ:ALTR)," TIG Advisors (1.5% stake) is urging Altera investors to vote against lead independent director T. Michael Nevens' reelection at the FPGA maker's May 11 annual meeting. It's too late for investors to submit alternate candidates.
- TIG argues rejecting Nevens will "send a strong signal to the Board to immediately re-engage with Intel." It also thinks the company's reported decision to reject a $54/share Intel offer is unsurprising given "Altera has had a history of overestimating its growth rate."
- The firm thinks Altera would need to produce annual EPS of $2.70 to justify a $54/share valuation, something it thinks is "unlikely to happen over the next few years given the outlook for a secular decline in worldwide base station deployments in 2016-2019 until 5G starts ramping." The 2015 EPS consensus is at $1.31.
- Bloomberg reported two weeks ago TIG, Cadian Capital, and other investors were pushing Altera to restart Intel talks. The company posted a Q1 miss and provided light Q2 guidance last Thursday.
Fri, Apr. 24, 2:03 PM
- Though the Nasdaq is up 0.7% thanks to market-pleasing earnings from Google, Microsoft, and Amazon, chip stocks (SOXX -2.1%) are adding to their Thursday losses after Freescale, Altera, Microsemi, and Maxim joined the ranks of chipmakers offering soft Q2 guidance; Texas Instruments, Xilinx, and Qualcomm did so on Wednesday afternoon.
- NXP (NXPI -4.3%), set to merge with Freescale in a cash/stock deal, is selling off ahead of its April 29 Q1 report. RF chipmakers Skyworks (SWKS -3.8%), Qorvo (QRVO -4.4%), and Avago (AVGO -5.2%) are also seeing steep declines.
- Other decliners include a slew of telecom/networking, microcontroller, and analog/mixed-signal chipmakers. The group includes Marvell (MRVL -3%), ON Semi (ON -6.9%), Atmel (ATML -3.3%), Cypress (CY -4%), Lattice (LSCC -3.9%), Semtech (SMTC -6.9%), Cavium (CAVM -6%), PMC-Sierra (PMCS -2.9%), InPhi (IPHI -3.8%), and Silicon Labs (SLAB -2.9%). Chip packaging/testing firm Amkor (AMKR -5.7%) is also off; its Q1 report arrives on Monday.
- As was the case with TI and Xilinx, soft telecom equipment chip demand was often blamed by those guiding light yesterday afternoon. Freescale (FSL -3.5%) stated it expects network processor division sales to be down Q/Q and RF (base station power amplifier) division sales to be flat. Microcontroller, automotive, and analog and sensor division sales are expected to rise.
- Altera (ALTR -3.3%) stated its "telecom and wireless business, and particularly our wireless business globally looks to be quite weak in [Q2], while the rest for our business will in aggregate be flat to slightly up." Regarding its Q1 miss, the company notes "Industrial, test, compute and storage, and to a lesser extent military, fell short of our forecast" (share loss to Xilinx?).
- Maxim reports seeing "broad-based softness in communications infrastructure demand" and soft industrial bookings to go with healthier mobile/auto demand. The Galaxy S6 appears to be giving a lift to Maxim's mobile sales.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Thu, Apr. 23, 7:17 PM
- Arguably providing more ammo for those disgruntled shareholders pushing for an Intel (NASDAQ:INTC) deal, Altera (NASDAQ:ALTR) forecasts Q2 revenue will be down 4%-8% Q/Q. That implies a range of $400.6M-$418M, far below a $492.1M consensus.
- Telecom/wireless revenue (-12% Y/Y, 42% of total revenue) was a soft spot in Q1. As was industrial automation, military, & automotive (21% of revenue -7%). Networking, computer, & storage (17% of revenue, +2%) and other products (20% of revenue, +7%) were healthier. FPGAs were 84% of revenue, and CPLDs 8%. Book-to-bill was below 1.
- Shares have dropped to $40.45 AH, after having fallen 1.6% in regular trading in response to Xilinx's numbers, which were blamed to a large extent on soft mobile infrastructure demand. For those keeping score, Altera is now 26% below Intel's rumored $54/share offer price.
- Q1 results, PR
Thu, Apr. 23, 4:20 PM
Wed, Apr. 22, 7:12 PM
- In addition to missing FQ4 revenue estimates (while beating on EPS), Xilinx (NASDAQ:XLNX) is guiding for FQ1 revenue to be flat to down 4% Q/Q. That implies a range of $544.2M-$566.9M, below a $584.8M consensus.
- Hurting FQ4 sales: Telecom/data center chip revenue (39% of total revenue) fell 7% Q/Q and 26% Y/Y; Texas Instruments just cited telecom infrastructure weakness (particularly for mobile gear) as a reason for its Q1 sales miss and soft Q2 guidance. Industrial, aerospace, & defense revenue (42% of total) fell 7% Q/Q (seasonality) but rose 13% Y/Y. Broadcast, consumer, & automotive (17% of total) rose 12% Q/Q and 6% Y/Y.
- Helping EPS beat estimates: Gross margin was 69.9%, up 230 bps Y/Y and above guidance of 68%-69%. FQ1 GM guidance is at 69%-70%. Also boosting EPS: $175M was spent on buybacks, even with FQ3.
- Xilinx has fallen to $42.89 AH. Archrival Altera (NASDAQ:ALTR), which reportedly rejected a $54/share Intel buyout offer, has dropped to $42.25 ahead of tomorrow's Q1 report. Piper downgraded Altera to Neutral earlier today, citing valuation.
- Xilinx's FQ4 results, PR
Wed, Apr. 22, 5:35 PM
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Wed, Apr. 15, 2:19 PM
- Chip stocks are turning in a good day as Intel's Q1 report - it featured a revenue miss, in-line EPS, light Q2 guidance, solid margin and server CPU figures, and a capex budget cut - goes over well with a market that had low expectations following a March warning.
- Also: Analog/mixed-signal chipmaker Linear Technology is higher after beating FQ3 estimates, offering slightly soft guidance, and reporting healthy bookings
- After selling off in late March amid concerns about TSMC remarks and forex pressures, the Philadelphia Semi Index (SOXX +1.7%) is again within $4 of a high of $99.57. The Nasdaq is up 0.8%.
- Linear peers Texas Instruments (TXN +3.2%), Analog Devices (ADI +2.3%), Fairchild (FCS +3.4%), MagnaChip (MX +3.9%), Power Integrations (POWI +3.7%), InPhi (IPHI +4.2%), and ON Semi (ONNN +4%) are among today's standouts.
- Other gainers include Cree (CREE +3.9%), Audience (ADNC +8.5%), QuickLogic (QUIK +5.2%), Cavium (CAVM +3.1%), and reported Intel buyout target Altera (ALTR +2.4%). Audience (believed to supply a voice processor for the Galaxy S6) could be getting a lift from Samsung remarks about stronger-than-expected Galaxy S6 sales.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Mon, Apr. 13, 5:00 PM
- In what might be one of the most predictable acts of shareholder activism in recent memory, many large Altera (NASDAQ:ALTR) investors have sent letters to the company urging it to resume buyout talks with Intel (NASDAQ:INTC), sources tell Bloomberg. Cadian Capital (2.8% Altera stake) and TIG Advisors (1.5% stake) are said to be among the disgruntled parties.
- The letters followed reports Altera had rejected an Intel buyout offer in the low-to-mid $50s (Bloomberg reported $54/share). Altera closed at $34.58 the day before Intel buyout reports first broke, and at $43.86 today. They briefly tumbled on reports of Altera's rejection, but soon erased their losses as investors bet a deal would eventually occur.
- Altera +1.8% AH to $44.65. Intel's Q1 report arrives tomorrow afternoon; Altera's arrives on April 23.
Thu, Apr. 9, 11:32 AM
- After initially seeing double-digit losses in response to a CNBC report (later backed up by Bloomberg) stating Intel (NASDAQ:INTC) has broken off buyout talks due to price disagreements, Altera (ALTR +0.1%) is now near breakeven.
- With the FPGA vendor's shares still 22% below the $54/share offer price reported by Bloomberg, investors/traders are betting a deal will eventually happen.
- Altera is currently up 21% from where it traded before the WSJ reported of deal talks on March 27. Q1 results arrive on April 23.
Thu, Apr. 9, 9:11 AM
Thu, Apr. 9, 9:11 AM
- CNBC's David Faber reports Intel (NASDAQ:INTC) has ended talks to buy Altera (NASDAQ:ALTR) due to a failure to agree on price.
- Intel reportedly made an all-cash offer in the "low $50s" (sharply above Altera's Wednesday close of $42.00), and was rejected. Talks are said to have been going on for months.
- Intel -2.3% premarket to $30.60. Altera -10.6% to $37.65. Altera archrival Xilinx (NASDAQ:XLNX) -1.9% to $41.75.
- Previously: Intel reportedly in talks to buy Altera; shares soar
- Previously: Intel/Altera seen yielding many synergies, sparking more M&A
- Update: Bloomberg reports Intel offered ~$54/share.
- Update 2 (11:35AM ET): Altera has erased its losses, and Intel has mostly done the same. Xilinx is up slightly.
Tue, Apr. 7, 6:16 PM
- Though Juniper's (NYSE:JNPR) switches and routers often rely on home-grown ASICs, the company's new "compute-integrated" QFX5100-AA data center switch runs on an Intel (NASDAQ:INTC) Xeon server CPU. Meanwhile, a complementary "packet flow accelerator" module features an Altera (NASDAQ:ALTR) FPGA that can be programmed to run custom apps.
- Juniper claims the switch and module, which are aimed at financial services firms demanding high throughput and low latency, can eliminate the need for a separate server to handle data processing, along with the related network hops. Private Maxeler Technologies provides a programming environment for the FPGA.
- The switch and module begin shipping in Q3. Like Juniper's recently-launched QFX10000 data center spine switches, they take aim at fast-growing Arista (NYSE:ANET), whose low-latency switches have gained a strong following with HFT trading desks and other financial firms. Arista is no stranger to using x86 CPUs or Altera FPGAs in its hardware.
- Juniper rose 3.2% today; Arista rose 0.6%. Juniper's Q1 report arrives on April 23.
- An aside: Juniper's switch highlights the product synergies that could stem from an Intel acquisition of Altera; deal talks were reported two weeks ago.
Mon, Apr. 6, 3:15 PM
- Today's notable tech gainers include German 3D printer maker Voxeljet (VJET +5.6%), Chinese online real estate firm SouFun (SFUN +5.3%), software outsourcing firm EPAM Systems (EPAM +8.4%), voice processor developer Audience (ADNC +6.3%), smart TV/home automation chipmaker Sigma Designs (SIGM +4.9%), #2 Chinese online travel firm Qunar (QUNR +6.7%), and international e-commerce services firm Borderfree (BRDR +7.2%). The Nasdaq is up 0.7%.
- Notable decliners include FPGA maker Altera (ALTR -4.5%), optical component vendor NeoPhotonics (NPTN -11%), big data/analytics software provider Hortonworks (HDP -4%), and online family care marketplace Care.com (CRCM -4.4%).
- EPAM has joined other Russia-exposed names in rallying, as oil prices and the ruble both move higher. Sigma is reversing Thursday's post-earnings losses. Qunar has surged to new highs yet again, and is now up 58% since its March 16 Q4 report.
- Altera is returning some of the huge March 27 gains it saw on reports of Intel buyout talks. NeoPhotonics, a recent high-flyer, is down 15% over the last 2 trading days; on Friday, the company filed an 8-K making customary exec. compensation disclosures.
- Previously covered: GoPro, Sony, Geospace, SanDisk, Voltari, VMware, Resonant, 500.com
Mon, Mar. 30, 11:37 AM
- After rising 28.4% on Friday on reports Intel (INTC -0.3%) is in talks to buy the company, Altera (ALTR -3.8%) is paring its gains in response to downgrades from CLSA, Morgan Stanley, and Macquarie. Morgan Stanley has also downgraded Xilinx (XLNX +0.3%), which rose 5.8% on the reports.
- Reactions to the reports, which vindicate at least a few predictions, have been largely positive. Among the perceived benefits to Intel from a deal: 1) Cost synergies from handling the manufacturing of Altera's FPGAs in-house. 2) Lowering Intel's PC dependence amid soft industry demand. 3) The potential to better cater to the likes of Facebook and Google (and keep ARM rivals at bay) by creating Xeon server CPUs with built-in FPGA circuitry to accelerate algorithm performance. 4) The potential to create system-level solutions for servers, telecom infrastructure gear, and other products that combine processors, FPGAs, and other chips.
- CLSA: "[W]e view a potential Altera deal favorably given the manufacturing and end-market synergies ... Altera’s strong base station presence is valuable to Intel ... we see $0.05-0.10 accretion to our 2016 EPS, and additional accretion down the road as manufacturing moves in house."
- Cowen: "[W]e surmise the deal would be heavily debt financed ... ALTR is one of the only semiconductor companies with better gross margin than INTC ... PLDs are one of the only verticals requiring leading-edge silicon in which INTC does not compete."
- Though upgrading Altera to Market Perform, Wiliam Blair is more cautious. "[W]e believe Altera’s fundamentals have deteriorated as the company has faced multiple headwinds. These include market share loss to Xilinx, declining margins, delays in new product ramp-ups, and competitive issues ... On top of this, we believe Altera (as well as Xilinx) has been negatively affected by the increased adoption of SoC solutions, resulting in decreased demand for FPGAs for Glue Logic functions." Bernstein (still bearish on Intel) notes Altera's revenue is only equal to 3% of Intel's.
- If a deal happens, many think Xilinx will be acquired soon afterwards. The short list of chipmakers big enough to swallow Xilinx ($11.1B market cap) and arguably having complementary products includes Texas Instruments, Qualcomm, Analog Devices, NXP/Freescale (about to merge), Skyworks, and Avago. There's also some speculation Intel, which has sat out the chip industry's recent M&A wave, will follow up on an Altera deal by making other purchases to lower its PC exposure.
Altera Corp designs and sells programmable logic devices, HardCopy application-specific integrated circuit devices, power system-on-chip devices, pre-defined design building blocks known as intellectual property cores, and associated development tools.
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