AUSTIN, Texas—Programmable logic vendor Xilinx Inc. Wednesday (Oct. 17) became the latest chip company to blame macroeconomic sluggishness for lackluster quarterly results and revenue forecasts.
Moshe Gavrielov, Xilinx president and CEO, said in a conference call with analysts after the company reported quarterly results that fell short of analysts' expectations that the company would take steps to control costs such as reduce hiring and cut discretionary spending.
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Gavrielov said the macroeconomic environment continues to challenge semiconductor industry revenue growth, including Xilinx. "This clearly affected sales for the September quarter and has also resulted in lower-than-seasonal guidance for the December quarter.," Gavrielov said. "With the uncertain near-term business environment that Jon mentioned, we're practically taking steps to slow headcount growth, reduce discretionary spending.
Gavrielov said Xilinx continues to be confident about its long-term outlook, based on continued design win momentum of its latest 28-nm FPGAs. Sales of new products increased 7 percent sequentially in the quarter and more than 80 percent compared with the year-ago quarter, he said.
Xilinx (San Jose, Calif.) reported sales for $543.9 million for its fiscal second quarter, down 7 percent from the previous quarter and down 2 percent from the year-ago quarter. The company reported a net income of $123.4 million, or 46 cents per diluted share, down 5 percent from the previous quarter and down 2 percent from the year-ago quarter.
Xilinx' sales came in below consensus analysts' expectations of about $547 million, according to Yahoo Finance.
For the current quarter, Xilinx said it expects sales to decline 1 to 5 percent sequentially to between $516.7 million and $538.5 million. Analysts had expected Xilinx to forecast sales of about $562 million for the current quarter, which closes in December, according to Yahoo Finance.
Christopher Danely, an analyst with JP Morgan, said in a report circulated late Wednesday that his firm reduced its 2012 earnings-per-share estimate for Xilinx by 2 percent following the company's earnings report. Danely said JP Morgan had expected consensus estimates for semiconductor companies to decline during September earnings. "However, we continue to expect semiconductor stocks to rally during September earnings, just like last quarter, as we believe the decline in estimates will be small given margins and inventory are close to the trough," Danely wrote.