Earnings Preview: Xilinx

| About: Xilinx, Inc. (XLNX)

Xilinx (NASDAQ:XLNX) is expected to report Q2 earnings after market close Wednesday, October 15 with a conference call scheduled for 5:00 ET.

Guidance

The consensus estimate is 37c for EPS and $482.09M or revenue, according to First Call. Management has provided guidance for Q2 of revenues to be down 3% to up 1% QoQ , or $473.5M to $493M; with gross margins of 63% to 64%.

Analyst Views

The company highlighted that it continues to maintain leadership in leading-edge products and currently has 90% of design wins at 65nm, and expects see the benefit from the share gain with time. The company also plans to introduce its 45nm product in late CY08. The company believes WiMAX and LTE (Virtex-5) are strong areas of future growth vs. ALTR.

Deutsche Bank's estimates for 2Q are revenues of $483.4M (down 1% q/q) and EPS of 37c. Deutsche expects that Xilinx will report revenues in-line with company guidance and will lower Q3 forecasts versus Street estimates of 39c and $492.3M. Deutsche would prefer to remain on the sidelines in the shares given the lack of growth in the past few years and the weakening macroeconomic environment.

Baird's recent checks indicated networking revenues declined 20% in the September quarter sequentially. Based on current order patterns, Baird says, networking revenues are expected to be down another 10% sequentially in the December quarter, which is about 15% to 20% below industry expectations. Baird said that translates into an estimated $20M in revenue shortfall for the second-half of this year, leading the firm to believe the company could come at the lower end of the revenue guidance range for the September quarter, and guide flat to down for the December quarter.

Key issues for the call: Overall company guidance and details on expectations for growth in the communications segment; commentary on the margins; and an update on Xilinx's share repurchase plan.

Next Event: Xilinx's industry-leading programmable logic solutions enabling automotive applications will be showcased at Convergence 2008, October 20-22 in Detroit, Michigan.