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Xilinx forecasts strong quarter on high chip demand
July 17, 2013 / 8:38 PM / 4 years ago

Xilinx forecasts strong quarter on high chip demand

(Reuters) - Programmable chip maker Xilinx Inc (XLNX.O) forecast revenue above Wall Street’s estimates for the current quarter due to strong sales to the telecoms, aerospace and defense industries, pushing its shares up 5 percent in extended trading.

Xilinx, which also reported better-than-expected earnings for the quarter ended June 29, forecast revenue in the second quarter to be flat to up 3 percent on the preceding three months.

This would imply second-quarter revenue within a range of $579 million to $596.5 million. Analysts on average were expecting revenue of $561.6 million, according to Thomson Reuters I/B/E/S.

San Jose, California-based Xilinx gets nearly half of its revenue from telecom customers. The company expects a gradual increase in telecom spending throughout the year, J.P. Morgan Securities analyst Christopher Danely said in a pre-earnings note.

Worldwide telecom services spending is projected to total $1.66 trillion in 2013, a 0.9 percent increase from 2012, according to research firm Gartner Inc (IT.N).

Xilinx’s chips are used by the U.S. Air Force and the European Organization for Nuclear Research (CERN), as well as by investors to make high-frequency trades.

The company, whose customers include Sweden-based Ericsson (ERICb.ST) and Hong Kong-based ZTE Corp (0763.HK), expects second-quarter gross margins of about 69 percent.

    Net income rose to $157 million, or 56 cents per share, in the first quarter, from $129.8 million, or 47 cents per share, a year earlier.

    Revenue fell 1 percent to $579 million, although revenue from its Industrial, Aerospace & Defense business, which accounted for 33 percent of current-quarter revenue, grew 9 percent from a year earlier.

    Analysts on average had expected earnings of 47 cents per share on revenue of $549.3 million.

    Xilinx shares rose as much as 5 percent in post-market trade, after closing at $43.53 on the Nasdaq on Wednesday.

    Reporting By Aurindom Mukherjee in Bangalore; Editing by Sriraj Kalluvila

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