Xilinx Beats, Shares Up - Analyst Blog


Programmable Logic Devices ( PLD ) maker  Xilinx Inc.  ( XLNX ) posted a net income of $127.0 million or $0.47 per share in the third quarter of fiscal 2012 compared to a net income of $126.3 million or $0.47 per diluted share in the second quarter of fiscal 2012 and a net income of $152.3 million or $0.58 per share in the year-ago quarter.

However, the result easily beats the Zacks Consensus Estimate of $0.37 per share.

Sales of $511.1 million were down 10% year over year and 8% sequentially, better than management's revised guidance range of $510.8 million to $538.5 million. The top line was impacted by particularly weak business from large communications customers, but came in better than management's expectation primarily due to increased business from large communication customers in Asia-Pacific and North America during the last two weeks of the quarter.

Mainstream products decreased 1% sequentially and base products were flat sequentially. New Product sales decreased 13% sequentially but increased 5% on a year-over-year basis. This category was impacted by declines from Virtex-5 customers in the wireless segment. Virtex-6, Spartan-6 and 28-nanometer product families all posted solid sales growth during the quarter.


Gross margin increased to 65.8% from 63.9% in the prior quarter and was better-than-management's expectations primarily due to favourable customer mix and and continued overall cost reduction.

Operating margin decreased to 26.8% from 27.8% in the previous quarter and from 32.3% in the year-ago quarter.

During the quarter, Xilinx generated $181 million of cash from operations and used $19 million in capital expenditures. Xilinx paid $50 million in cash dividends and repurchased 1.1 million shares for $32.5 million.

Xilinx ended the quarter with cash, equivalents and short-term investments of $1.7 billion, down from $2.8 billion at the end of the previous quarter. Days sales outstanding increased by 3 days to 38 days. Inventory declined by $2.2 million sequentially. 


Xilinx, which competes with Altera Corporation ( ALTR ), expects strong growth from 28-nanometer and 40-nanometer product families in the March quarter. Consequently, Xilinx expects sales to be up 2% to up 6% sequentially. Sales from Europe are expected to increase, sales from Asia-Pacific expected to decrease and sales from North America and Japan to be approximately flat.

Gross margin is forecasted around 64% - 65% as the company absorbs new product ramp  costs and customer mix returns to normal historical level. Operating expenses in the March quarter are expected to be approximately $207 million, including approximately $2 million of amortization of acquisition-related intangibles.

The better-than-expected results and upbeat guidance drove a 7.17% increase in the share price in after market hours trading to close at $37.83. The stock, earlier, gained 5.85% to close at $35.30 in regular trading.

ALTERA CORP ( ALTR ): Free Stock Analysis Report
XILINX INC ( XLNX ): Free Stock Analysis Report

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of The NASDAQ OMX Group, Inc.

This article appears in: Investing , Business , Stocks

Referenced Stocks: ALTR , PLD , XLNX



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