Xilinx earnings boost PLD stocks

2 min read

Strong second-quarter earnings from Xilinx helped lift it and other programmable logic device makers Wednesday.

Xilinx (Nasdaq: XLNX) shares moved up $2.38 to $66.88 while Altera (Nasdaq: ALTR) and Actel (Nasdaq: ACTL) gained $4.06 and $1.75 a share, respectively.

Xilinx hurdled analysts' estimates in its second quarter, returning a profit of $114.1 million, or 32 cents a share, on sales of $437.4 million.

First Call Corp. consensus pegged it for a profit of 30 cents a share in the quarter.

On Wednesday, Chase H&Q reiterated its "strong buy" rating on the stock with a 12-month price target of $105 a share.

"Revenues came in at $437.4 million, up 20 percent sequentially, beating our recently revised top-line estimate of $425 million," the firm wrote in a research note. "For a typical summer quarter that was exceptional growth in our opinion."

Prudential Securities also reiterated a "strong buy" rating on the stock and maintains a 12-month price target of $115 a share.

The $437.4 million in sales marks an 83 percent improvement from the year-ago quarter when it earned $59.2 million, or 17 cents a share, on sales of $238.8 million.

Company officials credited strong demand from its North American customers and the popularity of its Vitrex and Vitrex-E product lines for the upside surprise.

"The communications end market contributed a record 78 percent of company revenues during the second quarter, as OEMs continue to design our programmable logic devices into their next-generation communications equipment," said CEO Wim Roelandts in a prepared release.

Xilinx said it cut its selling and administrative expenses to 16.1 percent of sales in the quarter, down from 17.4 percent in the first quarter.

Gross profit margins checked in at a record 26.1 percent.

Both Xilinx and Altera (Nasdaq: ALTR) were hammered earlier this month when a pair of brokerage firms downgraded the stocks.

On Monday, Altera met analysts' estimates in its third quarter and offered a relatively bright outlook.

Altera officials said it expects sales to improve 75 percent this year and about 50 percent in fiscal 2001.

Last quarter, Xilinx posted a profit of $93.8 million, or 27 cents a share, on sales of $364.9 million.

Its shares moved up to a 52-week high of $98.31 in June after falling to a low of $33 last October.

Twenty-one of the 24 analysts following the stock rate it either a "buy" or "strong buy."

First Call Corp. consensus expects it to earn 34 cents a share in the third quarter and $1.27 a share in the fiscal year.