Xilinx FQ2 financial results beat analysts’ forecasts on revenue and profit

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Xilinx FQ2 financial results beat analysts’ forecast on revenue and profit
Image: YouTube | Xilinx

Xilinx surprised Wall Street by beating its fiscal second-quarter earnings predictions on revenue and profit. The chipmaker turned in forecast defying financial results thanks to double-digit growth in its automotive and datacenter segments.

Although the firm did not comment on possible acquisition negotiations with AMD, it did offer better-than-expected guidance for the current period.

Automotive and Datacenter Sales on the Rise

In the September quarter, Xilinx made $767 million with earnings per share (EPS) of $0.79. That meant the company’s sales contracted by 8 percent while its profit shrunk by 11 percent year-over-year. But its FQ2 financial results represented sequential income growth of 5 percent and a 108 percent rise in EPS.

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The chipmaker’s intake also topped Wall Street estimates of $756.7 million in sales and EPS of $0.72.

Xilinx’s quarterly regulatory filings revealed its automotive revenue improved 36 percent sequentially while its datacenter income jumped 30 percent annually. The firm’s core business segment – which produces aerospace and defense; industrial; telecommunications, media & entertainment offerings – expanded by 11 percent year-over-year.

The manufacturer listed its T1 Telco Accelerator Card, a 5G networking component, as an FQ2 highlight. As fifth-generation mobile data networks have gone live in several key regions this year, the new product likely sold well.

A Bright Future Ahead – With or Without AMD

For the holiday quarter, Xilinx anticipates bringing in between $750 million to $800 million. If the corporation hits the midpoint of its guidance, it will earn 7.19 percent more than it did in FQ3 2019. The company will record its first growth in five quarters if it meets its forecast’s low end.

Wall Street has pegged its current period income $774.2, so the company could upend analyst expectations.

Right now, Xilinx seems capable of delivering back to back earnings surprises. The mounting popularity of 5G-enabled smartphones should drive sales of its networking components for years to come. The firm also had design wins with Subaru and Continental in FQ2 and announced partnerships with Avnet and Samsung earlier in the year. Those collaborations should provide the chipmaker with new revenue streams going forward.

Although Xilinx has hearty near and long-term prospects, it is also reportedly considering a takeover offer.

Earlier this month, the Wall Street Journal reported AMD is interested in buying its fellow chipmaker for around $30 billion. Such a deal would give the firm’s stakeholders a significant return on their investments. But its leaders could believe operating as an independent corporation is a better idea since the corporation has real growth potential.

Nevertheless, Xilinx looks to have a bright future ahead as a subsidiary or standalone enterprise.

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