Xilinx, Inc. Earnings Cheat Sheet: Increased Costs Strains Margins as Profit Drops

S&P 500 (NYSE:SPY) component Xilinx, Inc. (NASDAQ:XLNX) reported its results for the first quarter. Xilinx, Inc. designs, develops and markets programmable platforms and predefined system functions delivered as intellectual property cores.

Don’t Miss: Wall St. Cheat Sheet’s newest Feature Trades of the Month!

Xilinx Earnings Cheat Sheet for the First Quarter

Results: Net income for Xilinx, Inc. fell to $154.4 million (56 cents per share) vs. $158.6 million (58 cents per share) a year earlier. This is a decline of 2.7% from the year earlier quarter.

Revenue: Rose 3.5% to $615.5 million from the year earlier quarter.

Actual vs. Wall St. Expectations: XLNX beat the mean analyst estimate of 53 cents per share. It beat the average revenue estimate of $599.8 million.

Quoting Management: “Sales in the June quarter exceeded our expectations,” said Moshe Gavrielov, Xilinx President and Chief Executive Officer. “New product sales were exceptionally strong increasing 17% sequentially. Much of this growth came from strong customer demand for our 40-nm Virtex-6 and Spartan-6 families as well as our 65-nm Virtex-5 family. In addition, we continued to demonstrate our 28-nm technology leadership by shipping our second FPGA family, Virtex-7, during the quarter. With the industry’s highest performance, density and bandwidth, Virtex-7 FPGAs achieved design wins in a broad base of applications including wired and wireless communications, broadcast infrastructure, aerospace and defense and high performance computing.”

Key Stats:

Last quarter’s profit decrease breaks a streak of four consecutive quarters of year-over-year profit increases. In the fourth quarter of the last fiscal year, net income rose 7.8% from the year earlier, while the figure increased 42.5% in the third quarter of the last fiscal year, more than twofold in the second quarter of the last fiscal year and more than fourfold in the first quarter of the last fiscal year.

Gross margin shrank 1.3 percentage points to 63.7%. The contraction appeared to be driven by increased costs, which rose 7.2% from the year earlier quarter while revenue rose 3.5%.

Revenue has risen the past four quarters. Revenue increased 11.1% to $587.9 million in the fourth quarter of the last fiscal year. The figure rose 10.5% in the third quarter of the last fiscal year from the year earlier and climbed 49.3% in the second quarter of the last fiscal year from the year-ago quarter.

The company has now topped analyst estimates for the last three quarters. It beat the mark by 8 cents in the fourth quarter of the last fiscal year and by 7 cents in the third quarter of the last fiscal year.

Competitors to Watch: Altera Corporation (NASDAQ:ALTR), Lattice Semiconductor (NASDAQ:LSCC), QuickLogic Corporation (NASDAQ:QUIK), Cypress Semicond. Corp. (NASDAQ:CY), Microsemi Corporation (NASDAQ:MSCC), Atmel Corporation (NASDAQ:ATML), ON Semiconductor Corp. (NASDAQ:ONNN), Sajan, Inc. (SAJA), Texas Instruments Inc. (NYSE:TXN), and TranSwitch Corporation (NASDAQ:TXCC).

Don’t Miss Wall St. Cheat Sheet’s newest Feature Trades of the Month!

(Source: Xignite Financials)

More from The Cheat Sheet