Xilinx Climbs After Sales Exceed Estimates: San Francisco Mover
January 19, 2012, 5:41 PM ESTBy Ian King
Jan. 18 (Bloomberg) -- Xilinx Inc., a maker of programmable chips used in mobile-phone base stations, rose as much as 8.5 percent in late trading after new products helped generate more sales and profit than analysts had estimated.
Excluding some items, fiscal third-quarter profit was 41 cents a share, the San Jose, California-based company said today in a statement. Sales were $511.1 million in the period, which ended Dec. 31. Analysts had projected earnings of 37 cents a share and revenue of $496.5 million on average, according to data compiled by Bloomberg.
While third-quarter sales were hurt by weaker demand from makers of communications equipment, the company is getting strong growth from its newer products, said Chief Executive Officer Moshe Gavrielov. The explosive growth of smartphones should prompt carriers to buy more mobile-phone systems by later this year, reversing a slump in that market, he said.
“These phones generate huge, huge bandwidth demand,” Gavrielov said on a conference call. Networks have “to be upgraded. Otherwise, people will revolt against the fact that their phones, while flashy, can’t be used for anything.”
The stock rose as high as $38.30 in late trading following the announcement. The shares, up 11 percent in the past year, had gained 5.9 percent to $35.30 at the close in New York.
Xilinx and rival Altera Corp., also based in San Jose, dominate the market for chips that can be reprogrammed after they’ve been installed in electronic devices. The use of their products, traditionally limited to expensive communications and industrial machinery, is spreading to new areas, such as automobiles and consumer electronics.
Xilinx predicted that sales will rise 2 percent to 6 percent in the current period from the preceding three months. That indicates revenue of as much as $541.8 million, compared with an average analyst estimate of $505.7 million. Gross margin, or the percentage of sales remaining after deducting the cost of production, will be 64 percent to 65 percent. Analysts had projected a margin of about 64 percent.
--Editors: Nick Turner, Tom Giles
To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net
To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net
