Altera Announces Third Quarter Results

SAN JOSE, Calif. -- October 14, 2008 -- Altera Corporation (NASDAQ: ALTR) today announced third quarter sales of $356.8 million, down 1 percent from the second quarter of 2008 and up 13 percent from the third quarter of 2007. Third quarter net income was $94.7 million, $0.31 per diluted share, down from net income of $98.0 million, $0.32 per diluted share, in the second quarter of 2008. Third quarter net income was up 37 percent and earnings per diluted share were up 58 percent compared with the third quarter of 2007.

Year-to-date cash flow from operating activities was $341.4 million. Altera repurchased 2.1 million shares of its common stock during the third quarter at a cost of $42.3 million. Altera ended the third quarter with $1.3 billion in cash and investments.

Altera's board of directors has declared a quarterly dividend of $0.05 per share payable on December 1, 2008 to shareholders of record on November 10, 2008.

"Our sales came in toward the higher end of our expectations for this seasonally slow quarter. Our 65-nm FPGAs had another extremely strong growth quarter with sales once again more than doubling sequentially," said John Daane, president, chief executive officer, and chairman of the board. "We remain on track to ship during this quarter our next generation Stratix IV FPGAs, the programmable industry's first 40-nm devices."

Additional Stratix IV FPGA Highlights

Altera has successfully taped-out the first member of its 40-nm Stratix(R) IV family. This new family was engineered with the same highly reliable, test chip-centered development process used for prior FPGA families. Altera's Stratix IV family is the industry's first 40-nm FPGA and, when shipped later this quarter, will be one of the few 40-nm devices offered across the entire semiconductor industry. This new family extends the industry-leading density, performance, low-power, and software efficiency of prior-generation Stratix III FPGAs and, in addition, adds the industry's best available transceiver speed and bandwidth.

Altera has gained share in the FPGA market in recent years with products noted for their architectural innovation. With the Stratix IV family, Altera can offer customers even more attractive benefits based on a combination of both architectural and process-node leadership. The Stratix IV early adopter program has attracted more than twice the number of customers as any previous program. Nearly 600 customers are now part of this Stratix IV program and able to use Altera's Quartus(R) design software to design Stratix IV FPGAs into applications across all of Altera's market segments.

As development costs for competing ASICs climb and engineers are forced to use older process technology, the economics and performance of leading-edge programmable logic become significantly more attractive. By moving quickly to the 40-nm node, Altera has placed the company in a strong position to compete for designs that previously were the exclusive domain of an ASIC-based solution.

Business Outlook for the Fourth Quarter 2008

(1) Includes R&D tax credit catch-up benefit. Total year tax rate expected to be approximately 14.5%.

Financial Tables

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About Altera

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