Xilinx forecasts weak revenue from industrial, aerospace businesses

By Lehar Maan

(Reuters) - Chipmaker Xilinx Inc forecast current-quarter revenue largely below Wall Street's estimates as it expects lower revenue at its industrial and aerospace businesses.

Xilinx shares fell 4.5 percent after the company said it expects current-quarter revenue to be up or down 2 percent sequentially.

The forecast implies a third-quarter revenue range of $586.9 million (367.9 million pounds) to $610.9 million. Analysts on average were expecting revenue of $607.8 million, according to Thomson Reuters I/B/E/S.

The industrial, aerospace and defence business units accounted for 38 percent of Xilinx's revenue in the second quarter.

"After four consecutive growth quarters in industrial and aerospace and defence, we expect this category to decline sequentially," Chief Financial Officer Jon Olson said on a call with analysts.

Semiconductor chips made by Xilinx are sold off the shelf and can be programmed by customers. The company's chips are used by a wide range of customers, which include wireless carriers, high-frequency traders, the U.S. Air Force and the European Organization for Nuclear Research (CERN).

Sweden's Ericsson and Hong Kong-based ZTE Corp are two of its large customers.

"They did lose a bit of share with older generation technology at a large European customer and that is a headwind that is going to last for about a quarter of two," Mizuho Securities analyst Ruben Roy told Reuters.

Xilinx, which competes with Altera Corp, Lattice Semiconductor Corp and Microsemi Corp, also reported lower revenue from Europe and Japan.

"A large customer in the communication segment has been transitioning away from Xilinx ... They are moving more toward Altera," William Blair & Co analyst Anil Doradla said.

Doradla speculated the customer could be Ericsson.

The company reported revenue of $598.9 million, 10 percent higher from the prior-year quarter.

Xilinx's second-quarter net income rose to $141.5 million, or 49 cents per share in the second quarter, but missed analysts' estimates of 52 cents per share.

Analysts on average had expected revenue of $588.3 million, according to Thomson Reuters I/B/E/S.

(Reporting By Supantha Mukherjee, Lehar Maan & Aurindom Mukherjee in Bangalore; Editing by Saumyadeb Chakrabarty)

Source: http://news.yahoo.com/xilinx-forecasts-weak-revenue-industrial-aerospace-businesses-230923856--finance.html
Similar Articles: breast cancer awareness   revenge   American flag   college football   National Tequila Day