“We anticipate inventory normalization will continue through the first half of next year.”

In context

“ily driven by a more than 50% reduction in shipments to China, where comparisons will become easier as the exposure is now significantly smaller. Cash generation was quite strong, as operating cash flow was well above operating income. Altera delivered revenue of $412 million up 14% sequentially, consistent with guidance to support improved lead times by our distribution partners. Operating margins increased sequentially by 900 basis points on better gross margins and spending discipline. For Q4, we expect high-single-digit sequential revenue growth, as we work with our distribution partners to prepare for the cutover to Altera independent warehouse operations. Overall, billings remain below consumption, as end customers continue to work down inventory tied to previous supply constraints. We anticipate inventory normalization will continue through the first half of next year. Now turning to our Q4 guidance. We successfully worked down client customer inventory levels in Q3, in line with our expectations and despite continued client customer inventory reductions in Q4, CCG should grow towards the higher end of seasonal, often abnormal Q3. Revenue is expected to be flat sequentially across DCAI and NEX businesses in aggregate. Based on these factors, we expect revenue of $13.3 million to $14.3 billion in the fourth quarter. At the midpoint of $13.8 billion, we expect gross margin of approximately 39.5% with a tax rate of 13% and EPS of $0.12, all on a non-GAAP basis. On a GAAP basis, as we continue to execute on our cost actions and portfolio decisions, we expect additional restructuring charges in Q4. We continue to size the business to support trend line reven”