Altera Corporation (NASDAQ:ALTR) today announced 2007 sales of $1.26 billion, down 2 percent compared with $1.29 billion in 2006. New product sales increased 65 percent. Net income for 2007 was $290.0 million, $0.82 per diluted share, versus net income of $323.2 million, $0.88 per diluted share, in 2006.

Fourth quarter sales were $323.2 million, up 2 percent from the fourth quarter of 2006 and up 2 percent from the third quarter of 2007. Fourth quarter net income was $65.5 million, $0.20 per diluted share, down from net income of $99.9 million, $0.27 per diluted share, in the fourth quarter of 2006. Fourth quarter 2007 results include a previously announced $5.2 million pretax restructuring charge.

Altera repurchased 58.0 million shares of its common stock during 2007 at a cost of $1.2 billion, with 26.0 million shares repurchased during the fourth quarter at a cost of $509.3 million. Altera ended the quarter with $1.0 billion in cash and short-term investments.

Altera’s board of directors has declared a quarterly cash dividend of $0.04 per share payable on March 3, 2008 to shareholders of record on February 11, 2008.

“This was a challenging yet productive year for Altera. Although softer demand led to a disappointing sales year, we are very pleased to have our 65-nm FPGAs shipping and being well received by our customers. This newest generation of FPGAs, with industry-leading low-power and superior performance, extends the innovation advantages which are the basis of our strong competitive position,” said John Daane, president, chief executive officer, and chairman of the board. “In addition to these and other new device introductions, our newest software and intellectual property offerings round out a substantial year of Altera innovation. We also took major steps to lower operating expense in 2007, and we will do so again in 2008. In 2007 we initiated our first quarterly dividend and a significant increase in our share repurchase plan to return additional value to shareholders.”

Several recent accomplishments mark the company’s continuing progress.

• Altera is now shipping the industry’s highest density FPGA, the Stratix® III EP3SL340 device which delivers power, performance, and compile-time benefits to Altera’s customers. The EP3SL340 provides a 25 percent performance advantage over competing high-density FPGAs and leverages Altera’s Programmable Power Technology to deliver 29 percent lower power consumption. Altera’s Quartus® II software delivers significant productivity benefits for Stratix III customers compared to competing offerings, including superior system level design tools and faster compile times. The unmatched combination of low power, high performance, and high density make the Stratix III family an ideal solution for a broad range of applications in a variety of end markets, including communications, computer and storage, and military/aerospace.
• Altera introduced the new, zero power MAX® IIZ CPLD family to address the increasing system complexity of high volume portable applications. Targeted towards ultra high volume, power-sensitive systems, the new CPLD leverages the architectural advantages of the MAX II family to offer a denser, higher IO count and lower power solution for portable applications markets.
• All eight members of the low-cost Cyclone® III FPGA family, the industry’s first and only low-cost 65-nm FPGAs, are now shipping in production quantities. Cyclone III devices are designed for the power-conscious and cost-conscious systems engineer. Consuming 75 percent less power than competing FPGAs, the Cyclone family offers an unprecedented combination of power, functionality, and low cost. First introduced in March 2007, Cyclone III devices have been quickly adopted into numerous systems in the wireless, military, display, automotive and industrial markets.
• Altera’s Nios® II processor core remains the FPGA industry’s most widely used processor core based on design starts, as confirmed by a recent report from market research firm Gartner. Altera’s Nios II processor core is a configurable 32-bit FPGA-based soft microprocessor. Since its introduction, Altera has shipped over 20,000 Nios II development kits. More than 5,000 customers worldwide, including the world’s largest electronics OEMs, have adopted Nios II embedded processors into their products.

• Altera’s Quartus II software has received EDN China’s 2007 Innovation Award, which honors the products and technologies that are widely accepted and used throughout the electronics industry. This leading award validates the high regard enjoyed by Altera’s development software in the Chinese electronics industry. Altera’s Quartus II software productivity leadership amplifies the value of Altera’s device leadership. With the release of the newest Quartus II software version 7.2, Altera customers can enjoy a compile time advantage three times that of competing high-end 65-nm FPGAs.

Conference Call and Quarterly Update:

A conference call will be held today at 2:00 p.m. Pacific Time to discuss the quarter's results and management's outlook for the first quarter of 2008. The web cast and subsequent replay will be available in the investor relations section of the company's web site at http://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 first quarter business update will be issued in a press release available after the market close on March 3, 2008.

Forward-Looking Statements

Statements in this press release that are not historical are "forward-looking statements" as the term is defined in the Private Securities Litigation Reform Act of 1995. Forward-looking statements are generally written in the future tense and/or preceded by words such as "will," "expects," "anticipates," or other words that imply or predict a future state. Forward-looking statements include any projection of revenue, gross margin, expense or other financial items discussed in the Business Outlook section of this press release. Investors are cautioned that all forward-looking statements in this release involve risks and uncertainty that can cause actual results to differ from those currently anticipated, due to a number of factors, including without limitation, customer business environment, vertical market mix, market acceptance of the company's products, product introduction schedules, the rate of growth of the company's new products including the Arria™ GX, Cyclone II, Cyclone III, Stratix II, Stratix III, Stratix II GX, MAX II and HardCopy® device families, changes in the mix of our business between prototyping and production-based demand, as well as changes in economic conditions and other risk factors discussed in documents filed by the company with the Securities and Exchange Commission from time to time. Copies of Altera's SEC filings are posted on the company's web site and are available from the company without charge. Forward-looking statements are made as of the date of this release, and, except as required by law, the company does not undertake an obligation to update its forward-looking statements to reflect future events or circumstances.

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.

Altera, The Programmable Solutions Company, the stylized Altera logo, specific device designations and all other words that are identified as trademarks and/or service marks are, unless noted otherwise, the trademarks and service marks of Altera Corporation in the U.S. and other countries. All other product or service names are the property of their respective holder.

Contacts:

Altera Corporation
Scott Wylie – Vice President, 408-544-6996
Investor Relations
swylie@altera.com
Mark Plungy – Senior Manager, 408-544-6397
Corporate Communications
newsroom@altera.com