Altera 8-K Altera Announces Second Quarter Results

EXHIBIT 99.1

INVESTOR CONTACT	MEDIA CONTACT
Scott Wylie	Anna Del Rosario
Vice President – Investor Relations	Director – Corporate Communications
Altera Corporation	Altera Corporation
(408) 544-6996	(408) 544-6397
swylie@altera.com	anna.delrosario@altera.com

ALTERA ANNOUNCES SECOND QUARTER RESULTS

San Jose, Calif., July 23, 2007 — Altera Corporation (NASDAQ: ALTR) today announced second quarter 2007 sales of $319.7 million, up 5 percent from the first quarter of 2007 and down 4 percent from the second quarter of 2006. New products grew 26 percent sequentially.

Second quarter 2007 net income was $80.5 million, $0.22 per diluted share, compared with net income of $77.3 million, $0.21 per diluted share, in the second quarter of 2006.

Altera repurchased 14.1 million shares of its common stock during the quarter at a cost of $316 million. Altera ended the quarter with $1.3 billion in cash and investments. Year to date, Altera has repurchased 21.2 million shares at a cost of $462 million.

The company is currently negotiating a financing commitment letter to provide a long-term credit facility of up to $750 million. If finalized, the company’s current intention is to draw $500 million from this facility and use the proceeds to repurchase its common stock. The company would then intend to repurchase up to $1.5 billion of its common stock from the beginning of 2007 through the first half of 2008, up $500 million from the previous $1 billion repurchase plan.

Altera’s board of directors has declared a quarterly cash dividend of $0.04 per share payable on September 4, 2007 to shareholders of record on August 10, 2007.

“All of our new programmable devices and our HardCopy^® structured ASICs contributed to the new product strength we saw in the quarter. Following a two quarter industry correction, we are very pleased to see the resumption of sequential growth in the second quarter,” said John Daane, president, chief executive officer, and chairman of the board. “The third quarter will see the roll-out of the Stratix^® III high-end FPGA devices, the arrival of production-qualified low-cost Cyclone^® III FPGAs, and the remainder of the Arria^™ GX FPGA family, all of which will add to our growth potential in the coming quarters.”

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Several recent accomplishments mark the company’s continuing progress:

• Introduced in software in May, the first production-qualified low-cost Arria GX FPGAs are now shipping. All members of this new family will be available on a production-qualified basis by September. These new transceiver-based devices are built on proven Altera transceiver technology delivering a comprehensive transceiver solution at an unparalleled price. Designed to provide the best levels of signal integrity, the family supports the three interface standards that are emerging as mainstream protocols – PCI Express, Gigabit Ethernet, and Serial RapidIO. The Arria GX family addresses the rapidly growing need for FPGAs with transceivers in cost-sensitive, high-volume communications, computer, storage, and industrial applications.

• Altera is now shipping the EP3C120 FPGA, the largest member of its newly introduced Cyclone III family, the industry’s only low-cost FPGA family manufactured on a 65-nm process technology. Product roll-out began in March and production-qualified devices will start shipping in August. The EP3C120 FPGA consumes only a fraction of the power required by other FPGAs of comparable capacity. It is ideal for a broad range of applications requiring both high integration and low power, such as wireless communications infrastructure, software defined radio, and video processing and imaging.

• For the second year in a row, Altera has been named to the Business Week Hot 100, a listing of the best performing growth companies with sales less than $1.5 billion. To be included in the list, Business Week ranks eligible companies based on three year sales growth, earnings growth and return on invested capital. Altera was one of only three semiconductor companies included in this year’s rankings.

Business Outlook for the Third Quarter 2007

Sequential Sales Growth	Flat to up 3%
Gross Margin	64% to 65%
Research and Development	mid-$70 million range
SG&A	high-$60 million range
Other Income	approximately $13 million
Tax Rate	13% to 15%

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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 third quarter of 2007. 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 third quarter business update will be issued in a press release available after the market close on September 5, 2007.

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 as well as comments relating to new products, initial shipment dates, anticipated product rollout schedules, intentions to secure financing, and share repurchase plans. 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, 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, the continuance of suitable financial market conditions and the ability of the company to secure desired financing, 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.

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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 atwww.altera.com.

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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.

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ALTERA CORPORATION

CONDENSED CONSOLIDATED STATEMENTS OF INCOME

(In thousands, except per share data)

(Unaudited)

		THREE MONTHS ENDED									SIX MONTHS ENDED
		June 29 2007			March 30 2007			June 30 2006			June 29 2007			June 30 2006
Net sales		$	319,682		$	304,916		$	334,100		$	624,598		$	626,930
Cost of sales (1)	��		113,093			104,512			113,335			217,605			210,441
Gross margin			206,589			200,404			220,765			406,993			416,489
Operating expenses:
Research and development (1)			63,071			58,455			63,904			121,526			126,761
Selling, general, and administrative (1)			67,863			71,784			76,749			139,647			152,998
Total operating expenses			130,934			130,239			140,653			261,173			279,759
Income from operations			75,655			70,165			80,112			145,820			136,730
Interest and other income, net			17,985			17,113			10,781			35,098			23,214
Income before income taxes			93,640			87,278			90,893			180,918			159,944
Provision for income taxes			13,110			12,219			13,633			25,329			23,991
Net income		$	80,530		$	75,059		$	77,260		$	155,589		$	135,953
Net income per share:
Basic		$	0.23		$	0.21		$	0.21		$	0.44		$	0.38
Diluted		$	0.22		$	0.21		$	0.21		$	0.43		$	0.37
Shares used in computing per share amounts:
Basic			352,721			357,594			360,501			355,157			359,990
Diluted			359,542			363,648			367,092			361,595			367,070
Cash dividend paid per common share		$	0.04		$	—		$	—		$	0.04		$	—
Tax rate			14.0	%		14.0	%		15.0	%		14.0	%		15.0	%
% of Net sales:
Gross margin			64.6	%		65.7	%		66.1	%		65.2	%		66.4	%
Research and development			19.7	%		19.2	%		19.1	%		19.5	%		20.2	%
Selling, general, and administrative			21.2	%		23.5	%		23.0	%		22.4	%		24.4	%
Income from operations			23.7	%		23.0	%		24.0	%		23.3	%		21.8	%
Net income			25.2	%		24.6	%		23.1	%		24.9	%		21.7	%
Note:
(1)    Includes stock-based compensation expenses as follows:
Cost of sales		$	321		$	333		$	554		$	654		$	1,077
Research and development		$	4,918		$	5,513		$	7,977		$	10,431		$	15,901
Selling, general, and administrative		$	7,404		$	7,257		$	10,158		$	14,661		$	20,624

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ALTERA CORPORATION

CONDENSED CONSOLIDATED BALANCE SHEETS

(In thousands)

(Unaudited)

	June 29 2007			March 30 2007			December 29 2006
Assets
Current assets:
Cash and short-term investments	$	1,169,813		$	1,279,996		$	1,363,747
Accounts receivable, net		188,486			130,451			93,263
Inventories		73,532			83,156			78,477
Deferred compensation plan assets		70,951			73,206			69,378
Deferred income taxes and other current assets		142,930			144,520			146,187
Total current assets		1,645,712			1,711,329			1,751,052
Long-term investments		134,921			245,902			256,563
Property and equipment, net		182,319			184,774			178,363
Deferred income taxes and other assets, net		65,034			67,494			47,282
	$	2,027,986		$	2,209,499		$	2,233,260
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and current liabilities	$	97,762		$	130,515		$	243,727
Deferred compensation plan obligations		70,951			73,206			69,378
Deferred income and allowances on sales to distributors		273,799			280,817			298,078
Total current liabilities		442,512			484,538			611,183
Income taxes payable non-current		142,430			134,387			—
Other non-current liabilities		14,433			13,820			13,916
Stockholders’ equity		1,428,611			1,576,754			1,608,161
	$	2,027,986		$	2,209,499		$	2,233,260
Key Ratios & Information
Current Assets/Current Liabilities		4:1			4:1			3:1
Liabilities/Equity		1:2			1:2			1:3
Annualized YTD Return on Equity		20	%		19	%		23	%
Quarterly Depreciation Expense	$	7,468		$	7,479		$	7,133
Quarterly Capital Expenditures	$	5,013		$	13,890		$	10,692
Annualized Net Sales per Employee	$	469		$	461		$	506
Number of Employees		2,696			2,642			2,654
Inventory MSOH(a): Altera		2.0			2.4			2.3
Inventory MSOH(a): Distribution		1.2			1.3			1.3
Days Sales Outstanding		54			39			27

(a) MSOH: Months Supply On Hand

Note:

Certain reclassifications have been made to prior period balances in order to conform to the current period’s presentation.

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ALTERA CORPORATION

REVENUE SUMMARY

(Unaudited)

	Q2’07		Q1’07		Q2’06		Q-Q Growth		Y-Y Growth
Geography
North America	21	%	22	%	25	%	2	%	-19	%
Asia Pacific	33	%	33	%	27	%	7	%	19	%
Europe	25	%	25	%	24	%	2	%	-2	%
Japan	21	%	20	%	24	%	9	%	-17	%
International	79	%	78	%	75	%	6	%	1	%
Total	100	%	100	%	100	%	5	%	-4	%
Product Category
New	30	%	25	%	17	%	26	%	69	%
Mainstream	32	%	32	%	36	%	5	%	-15	%
Mature & Other	38	%	43	%	47	%	-7	%	-23	%
Total	100	%	100	%	100	%	5	%	-4	%
Market Segment
Communications	40	%	39	%	44	%	6	%	-12	%
Industrial	35	%	37	%	34	%	-1	%	-2	%
Consumer	16	%	15	%	13	%	11	%	11	%
Computer & Storage	9	%	9	%	9	%	12	%	-1	%
Total	100	%	100	%	100	%	5	%	-4	%
FPGAs and CPLDs
FPGA	70	%	72	%	70	%	3	%	-3	%
CPLD	19	%	19	%	21	%	3	%	-16	%
Other	11	%	9	%	9	%	19	%	16	%
Total	100	%	100	%	100	%	5	%	-4	%

Product Category Description

Category	Products
New	Stratix II, Stratix II GX, Arria GX, Cyclone II, Cyclone III, MAX II, HardCopy and HardCopy II
Mainstream	Stratix, Stratix GX, Cyclone, and MAX 3000A
Mature & Other	Classic, MAX 7000, MAX 7000A, MAX 7000B, MAX 7000S, MAX 9000, FLEX 6000, FLEX 8000, FLEX 10K, FLEX 10KA, FLEX 10KE, APEX 20K, APEX 20KE, APEX 20KC, APEX II, ACEX 1K, Mercury, Excalibur, configuration and other devices, intellectual property cores, and software and other tools

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