) reported adjusted earnings per share of 62 cents in the first
quarter of fiscal 2015, which beat the Zacks Consensus Estimate by
a penny. Reported earnings increased 9.9% from the year-ago
Xilinx Inc - Earnings Surprise |
However, shares plummeted 9.14% in after-hours trade as the
company issued tepid revenue guidance for the September
Xilinx's revenues of $612.6 million were up 5.8% on a
year-over-year basis. The year-over-year increase was due to 20.0%
improvement in revenues from Communications & Data Center
segment (50.0% of first-quarter fiscal 2015 revenues) primarily due
to LTE deployments outside China. The company also witnessed higher
shipment of 40-nanometer (nm) and 65-nm technology.
Xilinx also witnessed a 3.0% year-over-year growth in revenues
from Broadcast, Consumer & Automotive (15% of first-quarter
revenues) and revenues from Other sources, comprising 2.0% of total
revenue, increased 11.0% year over year. However, revenues from
Industrial, Aerospace & Defense segment (31.0% of first-quarter
revenues) were down 11.0% year over year.
Geographically, revenues from North America were down 12.0% year
over year while Asia Pacific and Japan increased 26.0% and 21.0%
year over year, respectively. On the other hand, revenues from
Europe were down 7.0% on a year-over-year basis.
Xilinx reported 16 basis points (bps) gross margin expansion
year on year to 69.1%, primarily attributable to higher revenues
and favorable product mix.
Adjusted operating expenses (excluding amortization) for the
quarter increased 5.2% to $214.5 million but as a percentage of
revenues, operating expenses were down 20 bps on a year-over-year
basis. This positively impacted Xilinx's operating margins which
increased 36 bps year over year.
Xilinx's adjusted net income for the quarter came in at $176.0
million or 62 cents compared with $159.4 million or 56 cents
reported in the year-ago quarter.
Xilinx ended the quarter with cash, equivalents and short-term
investments of $2.48 billion compared with $2.46 billion in the
previous quarter. The company has long-term debt (long-term debt
plus current portion) of $1.56 billion. Xilinx generated $130.0
million of cash from operations and incurred $9.0 million in
capital expenditure. The company paid $77.0 million in cash
dividends and repurchased shares worth $100.0 million.
Management expects September quarter revenues in the range of
(4.0%) to flat on a sequential basis, which comes to a range of
$588.0 to $612.6 million range, lower than the Zacks Consensus
Estimate of $643.0 million. This tepid revenue guidance was due to
delay in China LTE deployments.
Gross margin is forecast to be roughly 70.0%. Operating expenses
are expected to be around $236.0 million, including approximately
$2.5 million of amortization of acquisition-related intangibles.
Share count is expected to be approximately 282 million and
effective tax rate to be about 13.0%.
Xilinx also provided a glimpse of its fiscal 2015 expectations.
The company expects revenues to increase 5.0% for the fiscal year
buoyed by the 28-nm growth opportunities. The company also expects
its December and March quarters to be positively impacted by
wireless sales in China.
Management also expects gross margins to remain in the range of
68.0% to 70.0% while the operating expenses to be lower due to
operating efficiencies. The company stressed the importance of
innovative product development and expects its research and
development, and selling, general and administrative expenses to be
$530.0 million and $380.0 million, respectively, for fiscal 2015.
Xilinx reported better-than-expected first-quarter results.
However, second-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 also expects a
rebound in the Industrial, Aerospace & Defense sales. 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 other stocks, such as
) with the same Zacks Rank as Xilinx.
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