Xilinx forecasts weak quarter after meeting guidance

Xilinx's SoC platform helped the company meet guidance for the September fiscal quarter despite challenges from global trade disputes. (Xilinx)
Xilinx's SoC platform helped the company meet guidance for the September fiscal quarter despite challenges from global trade disputes. (Xilinx)

FPGA and semiconductor IP supplier Xilinx, Inc. said it generated revenue of $833 million in the second quarter of fiscal year 2020 ended September, down 2% from the prior quarter and up 12% year over year. GAAP net income for the quarter was $227 million, or 89 cents per diluted share. Non-GAAP net income for the September quarter was $240 million, or 94 cents per diluted share.

According to Victor Peng, president and chief executive of Xilinx, the company’s earnings met revenue guidance despite a challenging business environment driven by global trade disputes. “Overall, the first half of our current fiscal year remained strong despite the impact of continued business restrictions related to Huawei which was offset by higher than expected 5G product demand from other global communications OEMs and stronger than expected growth in our data center business," said Peng in a statement. "However, we are seeing a combination of headwinds in the second half related to continuing business restrictions, weaker demand for communications products, and macro-related weakness offsetting strong overall growth in data center and improvement across our core vertical markets."

Peng added, “For fiscal 2020, we believe that third quarter will be our low point and we expect to see a return to sequential revenue growth in our fourth quarter. Despite the weaker third quarter, we expect fiscal year 2020 revenues to grow approximately 6% compared to fiscal year 2019, which represents the midpoint of our guidance."

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Xilinx reported that its Advanced Products category increased 29% year over year and constituted approximately 74% of total revenues in the second quarter. The company’s 16-nm node continued its accelerated ramp, with revenue increasing three-fold year-over-year, primarily driven by customers in 5G and Data Center applications.

The company also reported that revenue from its Zynq SoC platform grew 61% year over year, with continuing business momentum from communications, automotive and industrial. The Zynq SoC platform now represents 26% of total Xilinx revenue.

For the third fiscal quarter of 2020, Xilinx projects GAAP-adjusted revenue of $710 to $740 million, with gross margins of 66 to 60%.

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