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Xilinx (XLNX) to Post Q4 Earnings: What's in the Offing?

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Xilinx is set to report fourth-quarter fiscal 2020 results on Apr 22.

For fourth-quarter fiscal 2020, the company projects revenues of $750-$780 million.

The Zacks Consensus Estimate for revenues is pegged at $753.96 million, indicating a decline of 8.98% from the year-ago quarter’s reported figure. The consensus mark for earnings stands at 77 cents per share, implying a fall of 18.09% from the prior-year quarter’s reported number.

The company’s earnings beat the Zacks Consensus Estimate in three of the trailing four quarters and missed once, the average positive surprise being 2.38%.

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

Xilinx, Inc. Price and EPS Surprise

Xilinx, Inc. Price and EPS Surprise

Xilinx, Inc. price-eps-surprise | Xilinx, Inc. Quote

Factors at Play

Xilinx’s fourth-quarter fiscal 2020 top line is likely to have been driven by continued growth in cloud and high-performance compute customers.

Strong sequential revenue growth is also expected to have been fueled by the ramping up of programs for multiple emulation and prototyping customers in the core markets.

Growing demand for the company’s 60-nanometer UltraScale+ family is likely to have been a key driver. The company is also benefiting from strong demand for its Zynq platform, which is boosted by the adoption of the MPSoC family in wireless and across core vertical markets.

Moreover, datacenter revenues are likely to have grown in the quarter under review, backed by an expansion of the business at multiple hyperscalers. A partnership with Alibaba (BABA - Free Report) to power its data center is also expected to have been a positive for Xilinx.

Also, meaningful improvement in the core markets and moderate growth in DCG is likely to have remained a tailwind.

Besides, both A&D and ISM are likely to have improved in the fiscal fourth quarter. Automotive is also likely to have rebounded, owing to an increase in ADAS demand relative to the fiscal third quarter.

However, in its last earnings call, management had mentioned that the company forecasts the WWG business to be down significantly in the fiscal fourth quarter. Slowdown in both 5G and wired infrastructure deployments coupled with the ongoing global trade headwinds is likely to have dented the WWG business.

Moreover, a slower revenue ramp up from storage and networking customers is likely to have affected the top line in the to-be-reported quarter.

What Our Model Says

The proven Zacks model does not conclusively predict an earnings beat for Xilinx this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the chances of beating estimates. But that’s not the case here. 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 an Earnings ESP of -1.60%.

Stocks to Consider

Here are some stocks you may consider, as our model shows that these have the right combination of elements to beat on earnings in their upcoming releases:

CrowdStrike Holdings Inc. (CRWD - Free Report) has an Earnings ESP of +4.00% and a Zacks Rank of 2, currently. You can see the complete list of today’s Zacks #1 Rank stocks here.

Apple Inc. (AAPL - Free Report) has an Earnings ESP of +0.51% and a Zacks Rank #3.

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