A month has gone by since the last earnings report for Xilinx . Shares have added about 5.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Xilinx due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Xilinx's Q4 Earnings & Revenues Top Estimates
Xilinx delivered fourth-quarter fiscal 2021 adjusted earnings of 82 cents per share, beating the Zacks Consensus Estimate by 9.33%. Moreover, the bottom line comes in 5% higher than the prior-year quarter.
Revenues of $851 million surpassed the Zacks Consensus Estimate of $813 million and increased 13% year on year. This double-digit growth in the top line was mainly driven by strength in automotive, 5G and industrial end markets.
However, an expected decline in TME (AIT), weakness in Aerospace & Defense sales and soft demand in the Wired sector were headwinds in the fiscal fourth quarter.
Importantly, Advanced Micro Devices, Inc. (AMD) is set to acquire Xilinx for $35 billion by the end of this year.
Quarter in Detail
Product-wise, advanced product revenues climbed 16% year over year, contributing 73% to total revenues. Moreover, revenues from core products (27% of total revenues) moved up 3% from the year-ago quarter.
On the basis of end markets, AIT revenues (41% of total revenues) declined 6% on a year-over-year basis and 2% sequentially, chiefly due to an expected decline in TME and weak sales in Aerospace & Defense. However, strength in the industrial end market was a breather.
ABC (18% of total revenues) grew 30% year over year but declined 1% quarter on quarter. This year-over-year uptick mainly resulted from record performance at the Automotive end market, partially offset by seasonal declines in Broadcast and Consumer end markets.
WWG revenues (31% of total revenues) increased 43% year over year and 13% sequentially on ramped-up 5G deployments across multiple regions.
DCG revenues (9% of total) slid 5% from the year-ago period but increased 28% quarter on quarter.
Revenues from the recently added Channel group constituted 1% of total revenues.
Geographically, the company registered a year-over-year decrease of 16% in North America, 49% year-over-year jump in the Asia Pacific, 3% year-over-year decline in Europe and 13% year-over-year increase in Japan.
Margins
Non-GAAP gross profit increased 8% year over year to $579 million, while the gross margin contracted 280 basis points (bps) to 68%.
The company posted a non-GAAP operating income of $228 million during the fiscal fourth quarter, up 4% from the year-ago quarter. Operating margin contracted 200 bps to 26.8%, chiefly due to a lower gross margin. However, lower operating expenses as a percentage of revenues were a positive.
Balance Sheet and Cash Flow
Xilinx exited the fiscal fourth quarter with cash, cash equivalents and short-term investments of $3.08 billion compared with the prior quarter’s $3.32 billion.
The company’s total long-term debt (excluding current maturities) was $1.49 billion as of Apr 3. Long-term debt was significantly higher from the $747.1 million witnessed at the end of fiscal 2020. This upswing reflects the senior notes issuance of $750 million in May 2020.
Xilinx generated $240 million of cash from operations and $227.2 million of free cash flow during the reported quarter.
Due to the pending acquisition, the company has suspended its quarterly dividend and stock repurchase program. It also refrained from providing any outlook.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Xilinx has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Xilinx has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.
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Xilinx (XLNX) Up 5.8% Since Last Earnings Report: Can It Continue?
A month has gone by since the last earnings report for Xilinx . Shares have added about 5.8% in that time frame, outperforming the S&P 500.
Will the recent positive trend continue leading up to its next earnings release, or is Xilinx due for a pullback? Before we dive into how investors and analysts have reacted as of late, let's take a quick look at its most recent earnings report in order to get a better handle on the important catalysts.
Xilinx's Q4 Earnings & Revenues Top Estimates
Xilinx delivered fourth-quarter fiscal 2021 adjusted earnings of 82 cents per share, beating the Zacks Consensus Estimate by 9.33%. Moreover, the bottom line comes in 5% higher than the prior-year quarter.
Revenues of $851 million surpassed the Zacks Consensus Estimate of $813 million and increased 13% year on year. This double-digit growth in the top line was mainly driven by strength in automotive, 5G and industrial end markets.
However, an expected decline in TME (AIT), weakness in Aerospace & Defense sales and soft demand in the Wired sector were headwinds in the fiscal fourth quarter.
Importantly, Advanced Micro Devices, Inc. (AMD) is set to acquire Xilinx for $35 billion by the end of this year.
Quarter in Detail
Product-wise, advanced product revenues climbed 16% year over year, contributing 73% to total revenues. Moreover, revenues from core products (27% of total revenues) moved up 3% from the year-ago quarter.
On the basis of end markets, AIT revenues (41% of total revenues) declined 6% on a year-over-year basis and 2% sequentially, chiefly due to an expected decline in TME and weak sales in Aerospace & Defense. However, strength in the industrial end market was a breather.
ABC (18% of total revenues) grew 30% year over year but declined 1% quarter on quarter. This year-over-year uptick mainly resulted from record performance at the Automotive end market, partially offset by seasonal declines in Broadcast and Consumer end markets.
WWG revenues (31% of total revenues) increased 43% year over year and 13% sequentially on ramped-up 5G deployments across multiple regions.
DCG revenues (9% of total) slid 5% from the year-ago period but increased 28% quarter on quarter.
Revenues from the recently added Channel group constituted 1% of total revenues.
Geographically, the company registered a year-over-year decrease of 16% in North America, 49% year-over-year jump in the Asia Pacific, 3% year-over-year decline in Europe and 13% year-over-year increase in Japan.
Margins
Non-GAAP gross profit increased 8% year over year to $579 million, while the gross margin contracted 280 basis points (bps) to 68%.
The company posted a non-GAAP operating income of $228 million during the fiscal fourth quarter, up 4% from the year-ago quarter. Operating margin contracted 200 bps to 26.8%, chiefly due to a lower gross margin. However, lower operating expenses as a percentage of revenues were a positive.
Balance Sheet and Cash Flow
Xilinx exited the fiscal fourth quarter with cash, cash equivalents and short-term investments of $3.08 billion compared with the prior quarter’s $3.32 billion.
The company’s total long-term debt (excluding current maturities) was $1.49 billion as of Apr 3. Long-term debt was significantly higher from the $747.1 million witnessed at the end of fiscal 2020. This upswing reflects the senior notes issuance of $750 million in May 2020.
Xilinx generated $240 million of cash from operations and $227.2 million of free cash flow during the reported quarter.
Due to the pending acquisition, the company has suspended its quarterly dividend and stock repurchase program. It also refrained from providing any outlook.
How Have Estimates Been Moving Since Then?
In the past month, investors have witnessed an upward trend in estimates revision.
VGM Scores
Currently, Xilinx has a nice Growth Score of B, though it is lagging a lot on the Momentum Score front with an F. Charting a somewhat similar path, the stock was allocated a grade of D on the value side, putting it in the bottom 40% for this investment strategy.
Overall, the stock has an aggregate VGM Score of D. If you aren't focused on one strategy, this score is the one you should be interested in.
Outlook
Estimates have been broadly trending upward for the stock, and the magnitude of these revisions has been net zero. Notably, Xilinx has a Zacks Rank #3 (Hold). We expect an in-line return from the stock in the next few months.