Xilinx (XLNX) has a dissappointing Q2 (fiscal Q1 2008) 2007. Revenues were up just 1% from Q1, to $445.9 million. That is down from 7% from $481.4 million year-earlier. As part of its April 25, 2007 analyst conference management had given a guidance of a 1% to 5% sequential revenue increase.
What is going on? Are programmable logic devices (PLDs) becoming less relevant? Or is one of its competitors gaining market share?
Even at the current level Xilinx is profitable. It had net income of $84.3 million, which is actually up 2% from a year earlier due to cost-cutting measures. Diluted EPS was $0.28, up 17% from year-earlier largely because of a reduced share count from share buy backs.
This time around, at the July 19 analyst conference, management guided to flat to slightly down revenues for this new quarter. Partly this is normal seasonality; Europe essentially shuts down for much of the summer.
Management said they failed to reach their expectation because of weak European demand. This is somewhat odd because other companies, and general economic indicators, have shown Europe to be doing well.
Xilinx is known for its large scale PLDs known as FPGAs and CPLDs. 45% of their revenues in fiscal Q1 were in the Communications sector. Communications spending has been eratic for years.
New products are being shipped, notably the Virtex-5 line. Management is hoping these will help gain market share as the year goes forward.
A big rival of Xilinx is Altera. They will be releasing results after the market closes today. I'll be listening to the analyst conference and posting my notes (follow this link) at OpenIcon.
It is hard to tell but PLDs compete to some extent with custom-designed chips and off-the-shelf components. If Altera sales were also weak, it might indicate at least a short-term shift.
My Xilinx page (includes links to past analyst conference summaries)
My Altera page
Xilinx Investor relations page
Altera Investor relations page