) reported adjusted earnings per share of 53 cents in the fourth
quarter of fiscal 2014, which lagged the Zacks Consensus Estimate
of 55 cents per share. Reported earnings increased 12.0% from the
Shares fell 4.62% in after-hours trade as the company provided
a tepid guidance for the June quarter.
Xilinx's revenues of $617.8 million were up 16.1% on a
year-over-year basis but beat the Zacks Consensus Estimate of
$611.0 million. The year-over-year increase was due to 30%
improvement in revenues from Communications & Data Center
segment (49% of fourth-quarter fiscal 2014 revenues) primarily
due to China LTE deployments.
The company also witnessed a 7% year-over-year growth in
revenues from Industrial, Aerospace & Defense segment (34% of
fourth-quarter revenues). Moreover, revenues from Broadcast,
Consumer & Automotive (15% of fourth-quarter revenues), and
Other sources (2% of fourth-quarter revenues) increased 2% year
Xilinx reported strong sales from its 28-nanometer (nm) which
increased 40% sequentially. The company witnessed strong sales of
its Virtex, Artix, Zynq and Kintex products as well.
Geographically, revenues from North America remained flat
while Asia Pacific and Japan increased 48% and 16% year over
year, respectively. However, revenues from Europe were down 6% on
a year-over-year basis.
Xilinx reported 157 basis points (bps) gross margin expansion
on a year-over-year basis to 67.6%, primarily attributable to
higher revenues and favorable customer mix.
Adjusted operating expenses (excluding amortization) for the
quarter increased 11.9% to $225.9 million but as a percentage of
revenues, operating expenses were down 137 bps on a
year-over-year basis. This positively impacted Xilinx's operating
margins which increased 294 bps on a year-over-year basis.
Adjusted net income for the quarter came in at $158.5 million
or 53 cents compared to $133.1 million or 48 cents reported in
the year-ago quarter. Excluding debt redemption loss of 3 cents,
the company's earnings came in at 56 cents per share.
Xilinx ended the quarter with cash, equivalents and short-term
investments remained flat sequentially at $2.46 billion. During
the quarter, Xilinx generated $189.0 million of cash from
operations and incurred $14 million in capital expenditure. The
company paid $67.0 million in cash dividends and repurchased
shares worth $73.9 million.
Management expects the communications segment to continue to
show strength due to the China LTE scenario. Xilinx expects
revenues from the industrial and aerospace to be flat
sequentially while revenues to decrease due to a decline in
aerospace and defense.
Buoyed by the growth from AVB and automotive, Xilinx expects
its broadcast, consumer and automotive revenues to increase
Keeping these factors in consideration, management expects a
0% to 4% sequential ($617.8-$642.5 million) increase in total
revenue for the June quarter. The Zacks Consensus Estimate is
pegged at $638 million, higher than the mid-point of the
Gross margin is forecast to be roughly 68%, flat sequentially.
Operating expenses are expected to be around $220.0 million,
including approximately $2.5 million of amortization of
acquisition-related intangibles. Share count is expected to be
approximately 286 million. Effective tax rate is expected to be
about 13% to 14%.
Xilinx reported mixed fourth-quarter results. The
first-quarter revenue guidance was tepid. Nonetheless, the
growing demand for 28-nm nodes driven by higher wireless
deployments and strength in the wired communication segment are
expected to remain the growth drivers. The company's product
launches are also expected to boost revenues.
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 #2 (Buy). Investors may
also consider stocks, such as
) with the same Zacks Rank as Xilinx.
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