Xilinx reports solid Q1 earnings; misses Q2 sales outlook

Xilinx, Inc. (NASDAQ: XLNX) stock was down about 5% in the after-market trading as the Q2 sales outlook came in short of estimates. This was mainly due to the chip shipment ban to Chinese-based Huawei. However, first-quarter results came in better-than-expected.

The chipmaker’s stock has jumped about 55% this year backed by the solid Q4 results. It touched a new 52-week high mark of $141.60 in April post the Solarflare, which would augment the data center offerings in the latter half of the year.

Thanks to 66% jump in the wireless division, Xilinx reported sales of $850 million, up 24% from the last year. Analysts were expecting sales to come in at $847.37 million and the company had guided top line to come in the range of $835-865 million. Adjusted EPS grew 29% to 97 cents, surpassing Street expectations of 94 cents.

READ: Intel stock jumps as it surpasses Q2 estimates; Apple to buy its smartphone modem business for $1 billion

Asia-Pacific region saw a 42% growth in sales, which is a good sign for investors. It’s worth noting that the company has been able to sustain growth in the region despite shipment restrictions to Huawei. Europe and Japan also recorded double-digit growth while North America saw a modest sales growth of 3%.

From the end market point of view, Wireless Group continued its solid performance primarily aided by strong chip shipments to telecom firms for 5G network deployment.

A&D, Industrial and TME market and Automotive, Broadcast and Consumer market saw 10% growth in sales while Data Center continued its poor performance from the last quarter with the sales declining 13% from the prior-year period.

CEO Victor Peng talking about the Q1 performance had said, “I am pleased to report that we were able to achieve the mid-point of our revenue guidance for the first fiscal quarter, despite export control restrictions that impacted shipments to one of our customers in China. This clearly demonstrates our focused execution and is strong evidence of the resilience and diversity of our business model.”

During the first quarter, the company paid $94 million as dividends while repurchasing 3 million shares at a price of $105.50 per stock.

Q2 Outlook

Xilinx expects sales for the second quarter to be between $800-850 million compared to $852.93 million forecasted by the street. The chipmaker has taken into account the shipment ban to Huawei into the guidance. Analysts are expecting adjusted earnings of 93 cents per share, up 10.7% from the prior-year period.

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