Bright Outlook Buoys Xilinx

Shares rise on strong top-line guidance.
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(XLNX) - Get Report

exceeded Wall Street's second-quarter expectations and raised hopes for the current quarter.

Investors were pleasantly surprised and quickly bid the stock up. In after hours trading, shares were recently gaining $1.73, or 7.2%, to $25.65.

The San Jose, Calif., chipmaker posted a profit of $93 million, or 27 cents a share (including the expense of stock options) compared to $82.3 million, or 24 cents a share. Revenue was up 17% to $467.2 million. Without the options charge, the company would have earned 32 cents a share.

Analysts polled by Thomson First Call were forecasting a profit of 23 cents (including options) a share on revenue of $456 million.

Second-quarter sales to "wireline and wireless communications vendors were particularly weak during the quarter as a result of inventory rebalancing and consolidation activity among several large customers," the company said.

Last month, Xilinx

lowered sales expectations, saying it expected revenue to be down between 4% and 7% sequentially, suggesting a range of between $448.1 million and $462.5 million.

Looking to the third quarter, the company said it expects revenue to range from $476.5 million to $490.6 million, well above Wall Street's expectation of $474.2 million. Xilinx said it expects gross margins of 61% or 62%, but did not give an EPS forecast. Analysts are looking for a profit of 24 cents a share.