Xilinx forecasts weak revenue from industrial, aerospace businesses

Reuters

* Sees 3nd-qtr revenue of $586.9-$610.9 mln vs est $607.8mln

* Second-quarter EPS $0.49/shr vs est $0.52/shr

* Second-quarter revenue $598.9 mln vs est $588.3 mln

* Shares drop 4.5 pct in post-market trading

By Lehar Maan

Oct 16 (Reuters) - Chipmaker Xilinx Inc forecastcurrent-quarter revenue largely below Wall Street's estimates asit expects lower revenue at its industrial and aerospacebusinesses.

Xilinx shares fell 4.5 percent after the company said itexpects current-quarter revenue to be up or down 2 percentsequentially.

The forecast implies a third-quarter revenue range of $586.9million to $610.9 million. Analysts on average were expectingrevenue of $607.8 million, according to Thomson Reuters I/B/E/S.

The industrial, aerospace and defense business unitsaccounted for 38 percent of Xilinx's revenue in the secondquarter.

"After four consecutive growth quarters in industrial andaerospace and defense, we expect this category to declinesequentially," Chief Financial Officer Jon Olson said on a callwith analysts.

Semiconductor chips made by Xilinx are sold off the shelfand can be programmed by customers. The company's chips are usedby a wide range of customers, which include wireless carriers,high-frequency traders, the U.S. Air Force and the EuropeanOrganization for Nuclear Research (CERN).

Sweden's Ericsson and Hong Kong-based ZTE Corp are two of its large customers.

"They did lose a bit of share with older generationtechnology at a large European customer and that is a headwindthat is going to last for about a quarter of two," MizuhoSecurities analyst Ruben Roy told Reuters.

Xilinx, which competes with Altera Corp, LatticeSemiconductor Corp and Microsemi Corp, alsoreported lower revenue from Europe and Japan.

"A large customer in the communication segment has beentransitioning away from Xilinx ... They are moving more towardAltera," William Blair & Co analyst Anil Doradla said.

Doradla speculated the customer could be Ericsson.

The company reported revenue of $598.9 million, 10 percenthigher from the prior-year quarter.

Xilinx's second-quarter net income rose to $141.5 million,or 49 cents per share in the second quarter, but missedanalysts' estimates of 52 cents per share.

Analysts on average had expected revenue of $588.3 million,according to Thomson Reuters I/B/E/S.

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