Xilinx ( XLNX) painted a bleak picture of its business, reporting flat performance in its most recently ended quarter and predicting financial results for the current quarter that lagged Wall Street expectations.

The San Jose, Calif., company, among the first semiconductor companies to deliver results this earnings season, added to disappointing reports by Intel ( INTC) and chip-equipment maker Lam Research ( LRCX).

Xilinx, which makes programmable logic chips, warned in December that sales in its fiscal third quarter were slowing down. But the company signaled continuing hardships after Thursday's market close.

According to Xilinx, sales in the current quarter will be flat to down 5% sequentially. Analysts polled by Thomson Financial had been expecting a 4.5% uptick in sales during the current quarter.

Still, investors bid shares up 33 cents in extended trading to $23.30; they closed the regular session down 2%, or 48 cents, at $22.97.

In the three months ended Dec. 30, 2006, Xilinx said sales were weaker than expected in all of its end-markets, except for industrial and other.

The communications end market experienced a 7% decrease in revenue compared with the previous quarter driven by softness in telecommunications. And revenue in the data processing end market tumbled 11%.

Revenue came in at $450.7 million, down 4% sequentially. Xilinx had initially projected a 2% to 5% sequential increase in third-quarter sales, but revised its expectations last month.

The company said it earned $87.5 million, or 26 cents a share. Analysts were expecting 23 cents a share profit, although it was unclear whether this included a 2-cent benefit that Xilinx said it received from a reinstatement of an R&D tax credit.

"Sales from mainstream and base products declined during the quarter," Xilinx CEO Wim Roelandts said in a statement. "However Xilinx experienced solid growth from new products, which increased 12% sequentially and represented 26% of total sales, up from 13% in the same quarter a year ago."

The company also said that its chip stockpiles, within the company and at distributors, fell to 118 days of inventory vs.126 days in the previous quarter.

Additionally Thursday, the company said its board of directors declared a quarterly cash dividend of 9 cents a share, payable on Feb. 28.