Weak chip sales to aero, defense clients hurt Xilinx
(Reuters) - Chipmaker Xilinx Inc (XLNX.O) forecast current-quarter revenue largely below analysts' average estimate, saying it expects sales from its aerospace, defense and wired telecom customers to be flat.
Shares of Xilinx, which also reported weaker-than-expected profit for the quarter ended March 29, were down 5 percent in extended trade.
Xilinx said it expected first-quarter revenue to stay flat or rise up to 4 percent sequentially.
This works out to revenue of $617.8 million-$642.5 million for the quarter ending June.
Analysts on average were expecting revenue of $638.4 million, according to Thomson Reuters I/B/E/S.
The company, which gets nearly half its revenue from telecom customers, expects fourth-quarter gross margins of about 68 percent.
Xilinx's chips are used by the U.S. Air Force and the European Organization for Nuclear Research (CERN), as well as by investors who make high-frequency trades.
High-frequency trading refers to trades based on complex computer-based algorithms that guide decisions on what stocks to buy or sell.
Xilinx's net income rose to $156 million, or 53 cents per share, in the fourth quarter, compared with $130.6 million, or 47 cents per diluted share, a year earlier.
Analysts on average expected earnings of 55 cents per share on revenue of $612.1 million.
The company, which counts Sweden-based Ericsson (ERICb.ST) and Hong Kong-based ZTE Corp (0763.HK) among its major customers, said revenue rose 16 percent $617.8 million.
Xilinx expects revenue from its wired communications business, part of its largest end market — communications and data center — to be flat in the current quarter due to declining orders from a couple of large customers.
Sales at Xilinx's industrial, aerospace & defense business decreased 3 percent from the previous quarter.
The company's shares closed at $52.42 on the Nasdaq on Wednesday.
(Reporting by Aurindom Mukherjee in Bangalore; Editing by Kirti Pandey and Simon Jennings)