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Xilinx (XLNX) to Report Q1 Earnings: What's in the Cards?

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Xilinx is set to report fiscal first-quarter 2019 results on Jul 25.

The company beat the Zacks Consensus Estimate in three of the trailing four quarters, delivering an average positive surprise of 6.86%.

In the last reported quarter, the company’s earnings per share of 64 cents missed the Zacks Consensus Estimate of 66 cents but improved 12.3% from the year-ago period. Revenues increased 10.5% year over year to $673 million and beat the Zacks Consensus Estimate of $649 million.

For first-quarter fiscal 2019, Xilinx projects revenues in the range of $660-$690 million (mid-point $675 million). The mid-point of the company’s guided range is currently higher than the Zacks Consensus Estimate of $672 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 - Free Report) .
 
Moreover, increasing demand for the company’s Ultrascale+ FPGAs from data-center operators for providing FPGA-as-a-Service looks promising, with the client base featuring prominent names like Amazon (AMZN - Free Report) and Alibaba (BABA - Free Report) .

We note that the company’s 28-nanometer Zynq and 16-nanometer MPSoC product witnessed a new sales record, growing more than 60% year over year in the last reported quarter. Demand in all the company’s end markets i.e. automotive, industrial, and aerospace and defense, communication and consumer has been a tailwind.

For the June quarter, Xilinx anticipates the Broadcast, Consumer & Automotive end markets to improve year over year. We note that rapid growth in advanced driver assist systems (ADAS) is a key driver of its automotive business.

Xilinx is also riding high on its Data Center business, which the company believes to be the fasting growing one. The company’s focus on the business is further evident from the newly formed Data Center and TME (Testing, Measurement, and Emulation) segment, its new business segment starting this quarter.

On the last earnings call, management noted that the company’s communications segment will be down in the June quarter owing to the ban on supplies to ZTE Corp. Besides, near-term volatility in the Industrial, Aerospace and Defense segment also poses concern.

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 #3 and its Earnings ESP is 0.00%, which makes surprise prediction difficult.

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

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