Profit Up at Xilinx

But the company sees another quarter of lower revenue.
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(XLNX) - Get Report

delivered earnings in line with expectations but guided down revenue below expectations for the current quarter.

The San Jose, Calif.-based chipmaker delivered second-quarter net income of $86 million, or 24 cents a share, up from $56 million a year ago.

Revenue totaled $403 million, down 5% from the prior quarter but up 28% from last year's levels.

Analysts were expecting 24 cents in earnings on revenue of $399 million.

As the company had predicted a month ago, revenue in Asia Pacific was weak in the quarter, declining 15% sequentially. "Much of this weakness was attributable to excess inventories at a few U.S.-based customers with manufacturing operations in Asia Pacific and a slowdown within the China market for technology products," Xilinx said in a release.

Reflecting the inventory buildup that has sideswiped virtually all major chipmakers in the quarter, Xilinx said total days of inventory internally and at its distributors stood at 156 days, up from 131 days in the prior quarter.

Partly offsetting that weakness, European revenue, which is usually seasonally slow in the quarter, was better than expected. Sales in Europe were up 3% from the prior quarter and 45% from year-ago levels, helped by strength in the communications, industrial and auto markets.

By segment, Xilinx said the revenue breakdown in the quarter was as follows: 53% from communications, 13% from storage and servers, and 34% from industrial.

In mid-September, Xilinx

lowered its revenue outlook, citing an inventory correction underway in Asia. At the time it said September quarter revenue would be down 5% to 7% from the prior quarter's levels, instead of up 2% to 4% as it had forecast in July.

After the bell on Thursday, Xilinx predicted revenue will again be down again in the quarter underway, declining by an estimated 2% to 6%. Operating expenses should be about flat with the just-ended quarter.

Analysts had been expecting revenue to increase to $411 million in the period, generating earnings per share of 25 cents.

After hours, shares dipped 35 cents, or 1.2%, to $30.02. In regular trading, the stock gained 2.2%, to 7.9%, to $30.37.

Xilinx also said its board declared a quarterly cash dividend of a nickel per share payable on Dec. 1, 2004 to all stockholders as of the close of business on Nov. 17, 2004.