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Xilinx (XLNX) to Report Q2 Earnings: What's in the Cards?

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Xilinx (XLNX) to Report Q2 Earnings: What's in the Cards?

Xilinx (XLNX) fiscal second-quarter 2019 results are likely to benefit from its strong product portfolio and growing adoption in key segments.

Xilinx XLNX is scheduled to report fiscal second-quarter 2019 results on Oct 24.

The company beat the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive surprise of 5.95%.

In the last reported quarter, the company reported earnings of 74 cents per share, which beat the Zacks Consensus Estimate by a penny and were much higher than the prior-year quarter’s figure of 59 cents.

Revenues increased 14% year over year to $684.4 million and outpaced the Zacks Consensus Estimate of $672.2 million as well.

For second-quarter fiscal 2019, Xilinx projects revenues in the range of $700-$720 million.

Let’s see how things are shaping up for the upcoming announcement.

Factors at Play

Xilinx’s ongoing transition from a field programmable gate arrays (FPGA) provider to an all-programmable devices producer has been helping the company gain market share and counter stiff competition from the likes of Intel INTC.

Rising demand for the company’s Ultrascale+ FPGAs from data-center operators for providing FPGA-as-a-Service (FaaS) looks promising, with the client base featuring prominent names like Amazon AMZN and Alibaba BABA.

We note that the company’s first and second generation Zynq products hit a new sales record in the last reported quarter, growing 76% year over year, driven by robust demand in automotive, industrial, communications, and data center markets. The Zynq SoC Platform, which includes Zynq at 28nm and both MPSoC and RFSoC at 16nm, is also a significant contributor to revenues.

For the September quarter, Xilinx anticipates Data Center and TME (Testing, Measurement, and Emulation) segment to grow significantly on the back of key design wins from hyperscalers globally for accelerating applications beyond FaaS.

Strong wireless revenue growth is likely to more than offset a slight decline in wired revenues, thereby driving revenues for the Communications segment. Early 5G deployment activity in Korea and the withdrawal of the denial order on ZTE are anticipated to be tailwinds.

Automotive, Broadcast and Consumer segment is expected to be approximately flat whereas Industrial, Aerospace & Defense is expected to witness a decline.

Xilinx, Inc. Price and EPS Surprise

Xilinx, Inc. Price and EPS Surprise | Xilinx, Inc. Quote

What Our Model Says

According to the Zacks model, a company with a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) has a good chance of beating estimates if it also has a positive Earnings ESP. The Sell-rated stocks (Zacks Rank #4 or #5) are best avoided. You can uncover the best stocks to buy or sell before they’re reported with our Earnings ESP Filter.

Xilinx has a Zacks Rank #2 and its Earnings ESP is -0.30%.

You can see the complete list of today’s Zacks #1 Rank stocks here

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