Xilinx Tops, Shares Up - Analyst Blog

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Xilinx Inc.  ( XLNX ) recently posted net income of $134.1 million or 49 cents per diluted share in the fourth quarter of fiscal 2012 compared with a net income of $127.0 million or 47 cents per share in the third quarter of fiscal 2012 and a net income of $160.1 million or 59 cents per diluted share in the year-ago quarter.

However, the result easily beats the Zacks Consensus Estimate of 41 cents per share.

California-based Xilinx Inc. designs and manufactures a broad range of high-performance, high-density programmable logic devices (PLDs), such as field-programmable gate arrays (FPGAs) and complex-programmable logic devices (CPLDs).

Total sales were $559.0 million, down 5% year over year, but up 9% sequentially, better than management's guidance. This was primarily due to better-than-expected business from wireless communications customers deploying LTE and 3D technology coupled with a strong rebound across-the-board in the Industrial and Other category.

New product sales increased 11% sequentially driven by sales increases from 28-, 40-, 45-nanometer and 65-nanometer products. Mainstream products declined 4% and base products increased 21% sequentially.

The growth in six of the secondary end market segments that the company serves convinces the management of a broad-based recovery. Xilinx stated that 28-nanometer product family rollout continues at a rapid pace and management is confident that this will be the most successful node in the company's history. Xilinx expects that 28-nanometer sales will exceed $10 million in the June quarter.

Margins

Gross margin increased to 66.4% from 65.8% in the prior quarter, driven by favourable customer mix and continued overall cost reduction, including better-than-expected yield improvement on newer products and better inventory supply chain management.

Operating margin increased to 29.1% from 26.8% in the previous quarter and was down from 30.8% in the year-ago quarter.

During the quarter, Xilinx generated $208 million of cash from operations and used $20 million in capital expenditures. Xilinx paid $50 million in cash dividends and increased its quarterly cash dividend by $0.03 per share to $0.22 per share.

Xilinx ended the quarter with cash, equivalents and short-term investments of $1.9 billion, up from $1.7 billion at the end of the previous quarter. Days sales outstanding decreased by 3 days to 35 days. Inventory declined by $41 million sequentially. 

Guidance

Xilinx, which competes with  Altera Corporation  ( ALTR ), expects strong growth from 28-nanometer and 40-nanometer product families in fiscal 2013. Consequently, Xilinx expects sales to be up 1% to up 5% sequentially in the first quarter of fiscal 2013.  Sales from Europe are expected to be approximately flat, sales from Asia-Pacific expected to increase and sales from North America and Japan to be down.

Gross margin is forecasted around 65% - 66% as the company absorbs new product ramp  costs. Operating expenses in the June quarter are expected to be approximately $220 million, including approximately $2 million of amortization of acquisition-related intangibles. The majority of the sequential increase in operating expense is in R&D and related to the 28-nanometer ramp.

The better-than-expected results and upbeat guidance drove a 7.36% increase in the share price in after market hours trading to close at $36.85. The stock, earlier, gained 2.37% to close at $34.33 in regular trading.

Last week, Altera reported first quarter results, which missed estimates but guidance was in-line with expectations.


 
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.



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Referenced Stocks: ALTR , XLNX

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