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What: Shares of Altera (NASDAQ:ALTR) plunged 14% during intraday trading Wednesday after the company released mixed third-quarter results.
So what: Quarterly sales fell 10% year-over-year to $445.9 million, which translated to earnings which fell 24% to $0.37 per diluted share. For reference, while Altera's earnings actually beat expectations of $0.34 per share, sales fell short of analysts average estimates of $451.81 million.
Now what: Worse yet, Altera provided disappointing forward revenue guidance in the range of "minus 3% to plus 1%" -- or from $432.52 million to $450.36 million -- the midpoint of which is well below analysts' expectations for sales of $473.66 million.
To be sure, Altera shares don't look particularly expensive trading around 20.7 times last year's sales, and Altera does offer a solid 1.6% dividend to investors who are willing to wait for the business to turn around. That said, I wouldn't be surprised if the stock languishes from here, at least until the company can prove it has what it takes to resume sales growth. As it stands, I just don't think the stock is quite cheap enough yet to represent a compelling long-term investment.
Fool contributor Steve Symington has no position in any stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.