) reported adjusted earnings per share of 49 cents in the second
quarter of fiscal 2014, which lagged the Zacks Consensus Estimate
of 52 cents per share. However, reported earnings increased 6.6%
from the year-ago quarter.
Xilinx's revenues of $598.9 million were not only up 10.1% on
a year-over-year basis but also came ahead of the Zacks Consensus
Estimate of $588.0 million. The year-over-year increase was due
to 32% improvement in revenues from Industrial, Aerospace &
Defense segment (32% of second-quarter fiscal 2014 revenues) and
17% year-over-year growth in Broadcast, Consumer & Automotive
(15% of second-quarter fiscal 2014 revenues) which more than
offset the 3% decline in revenues from Communications & Data
Center segment (49% of second-quarter fiscal 2014 revenues)..
The company reported strong sales in Xilinx's 40-nanometer
(nm) and 45-nm products - Virtex-6 and Spartan-6.
Geographically, revenues from North America and Asia Pacific
increased 22% and 17% year over year, respectively, while
revenues from Europe and Japan decreased 7% and 5%, respectively,
during the same period of time.
Xilinx reported gross profit of $416.1 million which increased
16.8% from the year-ago quarter and margins increased 399 basis
points (bps) to 69.5%. The margin expansion was primarily
attributable to higher revenues and favorable customer mix.
Operating expenses for the quarter increased 21.3% from the
year-ago quarter due to higher research and development, and
selling, general and administrative expenses.
The company reported operating profit of $163.87 million, up
10.6% from the year-ago quarter, while margins expanded 11 bps.
Net Income for the quarter came in at $141.5 million or 49 cents
compared to $123.4 million or 46 cents reported in the year-ago
Balance Sheet & Cash Flow
Xilinx ended the quarter with cash, equivalents and short-term
investments of $2.26 billion, up from $1.84 billion in the prior
During the quarter, Xilinx generated $254.9 million of cash
from operations and incurred $8.4 million in capital expenditure.
Xilinx paid $67.2 million in cash dividends and repurchased
stocks worth $69.9 million.
Xilinx stated that the backlog, entering into the third
quarter, was up sequentially. The company also expects sequential
increase in revenues from all end markets and 28-nm products.
Consequently, Xilinx expects sales from Base and mainstream
products to be down.
Gross margin is forecast to be roughly 69.0%. Operating
expenses are expected to be around $225.0 million, including
approximately $2.0 million of amortization of acquisition-related
intangibles. Other income and expense is expected to be $9.0
million. Share count is expected to be approximately 291 million.
Effective tax rate is expected to be approximately 13%.
Management expects revenues from broadcast, consumer and
automotive to be down moderately due to consumer decreases which
is expected to be offset by revenue increases in the AVB and
automotive segment sequentially. Moreover, revenues from
industrial, aerospace and defense are also expected to decline
Xilinx reported mixed second-quarter results. The
third-quarter guidance was encouraging, reflecting recovery in
the semiconductor market on the back of expected higher spending
especially from telecom customers.
The company's transition into and the expected shipment of
28-nm nodes, and recovery in the semiconductor market are
catalysts. However, stiff competition from
) and dwindling PC (significant consumer for semiconductor chips)
market sales keep us concerned for the near term.
Currently, Xilinx has a Zacks Rank #1 (Strong Buy). Investors
can also consider other stocks, such as
), both carrying a Zacks Rank #1.
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