Profits up as sales dip at Xilinx, further drop forecast

Inventory problems at a few customers in the Asia-Pacific region more than offset unexpected strength in the European market, the company said.

The company announced revenues of $403 million in its second quarter, a sequential decrease of 5 percent from the prior quarter and an increase of 28 percent from the same quarter a year ago. Net income was $86 million compared to $56 million. European revenues, which are typically seasonally slow in the September quarter, were better than expected, increasing 3 percent sequentially and 45 percent versus the same quarter a year ago. Much of this increase was driven by strength in the communications, industrial and automotive sectors. However, sales to Asia Pacific were weak during the quarter, declining 15 percent sequentially. Much of this weakness was attributable to excess inventories at a few U.S.-based customers with manufacturing operations in Asia Pacific and a slowdown within the China market for technology products.

"New product sales increased 44 percent sequentially and represented 17 percent of total Xilinx sales, up from 6 percent a year ago. This is a strong testament to the customer acceptance and design win momentum of these products," said Wim Roelandts, Xilinx's chairman and chief executive officer, in a statement.

Roelandts added that Virtex-II Pro FPGA sales increased nearly 70 percent sequentially as customer design wins began moving into volume production; and that CoolRunner-II CPLD sales nearly doubled sequentially. Additionally, sales from the Spartan family of FPGAs increased to nearly 22 percent of total Xilinx revenues, up from 19 percent in the same quarter a year ago with most of this growth was driven by Spartan-IIE and Spartan-3 products, which are found in wide ranging applications such as digital television, media servers, automotive telematics and multi-function printers, Roelandts said.