Xilinx: Broad Portfolio And Strong R&D Are A Winning Combination
Timothy McIntosh • 14 Comments
Timothy McIntosh • 14 Comments
Tue, May 24, 3:37 PM
- Xilinx (NASDAQ:XLNX) is up 5.9% this afternoon on heavy volume after a StreetInsider report saying the company has drawn a $15B takeover offer, but from a mystery suitor.
- The company has been considered the only large-cap chipmaker with the attributes of a good target, after Intel's purchase of Altera. Apple suppliers including Qualcomm (NASDAQ:QCOM) or Broadcom (NASDAQ:AVGO) are the most likely suitors for Xilinx.
- Xilinx used yesterday's analyst day to reiterate guidance for fiscal 2017 (sales growth of 4-8%, opex growth of 7-9%) and prompt strong bullishness from Pacific Crest. Analyst John Vinh sees the firm taking share in field-programmable gate arrays from Intel's Altera, which has faced delays and has "already lost at 20 nm and 14 nm."
- Xilinx is expecting $750M in incremental revenue over the next five years, a modest 6% in compound annual growth. "Of the $750 million, $500 million is expected to be from market expansion, while $250 million should be from PLD share gains. This would imply ~$3.25 in EPS, which at 20x suggests fair value of $65," Vinh writes.
- That $65 value would be 37% upside from today's (higher) price; Vinh has a price target of $55 (16% upside).
- William Blair's Anil Doradla thought the overall tone was good but "lacked conviction" and was light on comment about the company's key wireless/wireline segments. He's maintaining an Outperform rating.
Mon, May 16, 4:45 PM
- Xilinx (XLNX +1.4%) has boosted its repurchase authorization by another $1B.
- The amount can be used on debt and equity securities. Over the past five years, the company says, it's bought back about 43M shares of stock for some $1.8B.
- "Over the past 10 years, Xilinx has returned 100% of operating cash flow to stockholders through a combination of dividend and repurchase," says CEO Moshe Gavrielov.
- Now read Xilinx's Free Cash Flow Generation Is Hard Not To Like »
Wed, Apr. 27, 6:11 PM
- Though Xilinx (NASDAQ:XLNX) beat FQ4 estimates, it's guiding for FQ1 revenue to be roughly flat relative to FQ4's $571.1M. That implies sales will miss a $578.7M consensus.
- No explanation is given in the earnings release for Xilinx's outlook. The company's 2015 sales were pressured by soft mobile infrastructure-related FPGA orders. Mobile infrastructure giant Ericsson posted weak results last week, and optical networking hardware firm Infinera is plunging this afternoon after providing a soft Q2 outlook.
- XLNX -3.9% after hours to $45.50.
- Xilinx's FQ4 results, earnings release
- Update: On its earnings call, Xilinx said its industrial and aerospace/defense business is expected to decline in FQ1; the company blamed a product program timing in aerospace/defense. Telecom/data center revenue is expected to grow thanks to "a continued ramp of our customers' wired [infrastructure] designs and a near-term firming in wireless."
Wed, Apr. 27, 5:01 PM
Wed, Apr. 27, 4:24 PM
Tue, Apr. 26, 5:35 PM
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Fri, Mar. 4, 5:51 PM
- Following a rough 2015 in which weak PC demand, slowing smartphone growth, plunging memory prices, and a late-year inventory correction all weighed, Wells Fargo's David Wong thinks a chip industry recovery is on the way.
- His rating for the sector has been upped to Overweight from Market Weight, and his ratings for Micron (NASDAQ:MU), Analog Devices (NASDAQ:ADI), and Microsemi (NASDAQ:MSCC) in particular have been raised to Outperform. Outperform ratings are reiterated for Intel (NASDAQ:INTC), Qualcomm (NASDAQ:QCOM), Linear (NASDAQ:LLTC), AMD, Xilinx (NASDAQ:XLNX), and SunEdison Semi (NASDAQ:SEMI).
- Wong argues 2016 chip industry growth could be as high as 7%
(with growth reaching double-digits by year's end), and that 8%-14% growth is possible in 2017. Gartner estimates industry revenue fell 1.9% in 2015 to $333.7B.
- Wong: "Over the last 5 years 2010-2015, semiconductor industry growth has tracked below global GDP for the most part. We think this has created significant pent-up demand created by the deferral of electronics goods purchases and aging of the installed base of electronics systems ... We think that there could well be the first signs of improvement in the year/year comparisons at some point in the June 2016 quarter in the many of the broader chip markets, including the industrial, communications infrastructure and PC markets."
- Some expectations for a recovery might already be priced in: The Philadelphia Semi Index (NASDAQ:SOXX) is up 18% from a February low of $74.80. However, it's still down 13% from a June high of $101.80.
- Earlier today, Broadcom (the company produced by the Avago/Broadcom merger) posted big gains after beating January quarter estimates and issuing healthy April quarter guidance. On its earnings call, Broadcom forecast solid April quarter growth for its wired infrastructure (telecom/networking chip) segment, and a 2H16 recovery for its mobile chip segment (recently hurt by soft iPhone-related demand). More cautious outlooks were provided for Broadcom's storage and industrial segments.
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Wed, Feb. 24, 9:10 AM
Thu, Jan. 21, 4:17 PM
- Chip stocks fared well (SOXX +1.5%) on a day the Nasdaq was nearly flat. The gains came after FPGA maker Xilinx (XLNX +8.6%) beat calendar Q4 sales estimates, issued solid Q1 guidance, and published an 8-K filing that has fueled hopes the company will join the ranks of chip firms to be acquired during the industry's M&A wave.
- Also: Microcontroller and SRAM/NOR flash memory maker Cypress Semi (CY +7.6%) affirmed its Q4 guidance against a backdrop of low expectations.
- Seeing the biggest gains was AMD (AMD +16.1%), which is two days removed from providing weak Q1 guidance to go with a Q4 sales beat. In spite of the guidance and the largely downbeat analyst commentary that has followed, AMD is now up 7% since the Q4 report arrived. Short-covering is likely helping - 120.4M shares (19% of the float) were shorted as of Dec. 31.
- Small-cap Xilinx rival Lattice Semi (LSCC +10.8%) was also a standout. Lattice (like Xilinx) has seen its share of M&A speculation, and CEO Darin Billerbeck has suggested he's open to a sale.
- Other notable gainers include Cavium (CAVM +3.6%), Silicon Motion (SIMO +3.7%), and Knowles (KN +6.5%) - Cavium is exposed to some of the same end-markets as Xilinx. MagnaChip (MX +13.9%) jumped two days after making a positive Q4 pre-announcement. Beaten-down Micron (MU +8%) also rallied strongly, possibly aided by a bullish Morgan Stanley note.
- On its earnings call (transcript), Xilinx mentioned the automotive market (a strong point for many chip companies, as chip content within cars steadily grows) is expected to see record sales in calendar Q1, and deliver 30% sales growth for FY16 (ends in March). Mobile infrastructure-related sales are expected to rise Q/Q, but deemed unlikely to reach a March 2014 peak anytime soon. CEO Moshe Gavrielov: "[E]verything until 2020 is likely to be of a smaller scale and the next big surge will be driven by 5G."
- Chip ETFs: SMH, XSD, PSI, SOXL, USD, SOXS, SSG
Thu, Jan. 21, 11:48 AM
- Xilinx (NASDAQ:XLNX) has added to the after-hours gains seen yesterday following the company's FQ3 sales beat and healthy FQ4 guidance. Apparently helping: An 8-K filing issued in tandem with Xilinx's earnings report that discloses execs will receive higher severance payments and accelerated equity award vesting in the event of a change of control.
- The changes are seen increasing the odds Xilinx, already a frequent subject of M&A speculation amid ongoing chip industry consolidation - particularly after Intel struck a deal to buy Xilinx archrival Altera - will be acquired. FBR's Chris Rolland notes Altera created similar change-of-control provisions six months before the Intel deal was reached.
- BMO's Ambrish Srivastava also thinks M&A odds have grown, and has upgraded Xilinx to Outperform. He sees mobile chip/IP giant Qualcomm (recently formed a server CPU-related partnership with Xilinx) and China's Tsinghua Unigroup as potential acquirers.
- Last May, Reuters reported Avago had reached out Xilinx, Maxim, and Renesas about potentially acquiring the companies. However, Avago later struck a $37B deal to acquire Broadcom.
Thu, Jan. 21, 9:16 AM
Wed, Jan. 20, 5:46 PM
- In addition to beating FQ3 revenue estimates (while posting in-line EPS), Xilinx (NASDAQ:XLNX) is guiding for FQ4 revenue to be roughly flat relative to FQ3's $566.2M. Consensus is at $564.9M.
- CEO Moshe Gavrielov on FQ3: "New product sales were exceptionally strong during the quarter increasing 18% sequentially, enabling Xilinx to reach the high-end of our sales guidance. Both our 7-series and UltraScale [FPGA] families reached new sales records during the quarter, driven by a very broad base of end markets."
- Segment performance: Telecom and data center (43% of revenue) sales +12% Q/Q and -3% Y/Y. Industrial, aerospace, and defense (41% of revenue) +7% Q/Q and -10% Y/Y. Broadcast, consumer, and auto (16% of revenue) -4% Q/Q and +7% Y/Y.
- Financials: Hurting FQ3 EPS: Gross margin was 68.5%, -160 bps Q/Q and -120 bps Y/Y, and slightly below guidance of 69%. FQ4 GM guidance is at 68%-69%. GAAP operating expenses rose by just 2% Y/Y to $227.6M. $100M was spent on buybacks. Xilinx ended FQ3 with $3.4B in cash and $1.6B in debt.
- Xilinx has risen to $45.90 after hours.
- Xilinx's FQ3 results, earnings release
Wed, Jan. 20, 4:22 PM
- Xilinx (NASDAQ:XLNX): FQ3 EPS of $0.49 in-line.
- Revenue of $566M (-4.6% Y/Y) beats by $11.5M.
- Shares +1%.
Tue, Jan. 19, 5:35 PM
Nov. 16, 2015, 3:40 PM
- IBM (IBM +1.5%) is partnering with FPGA chipmaker Xilinx (XLNX +1%) to provide servers based on its OpenPower platform (uses IBM Power CPUs, features servers from both IBM and third parties) in which Xilinx FPGAs power programmable accelerators for workloads such as high-performance computing (HPC), analytics, machine learning, and genomics.
- As part of the tie-up, IBM will create "solution stacks" consisting of Power-based server, storage, and middleware systems using Xilinx acceerators, and also develop and qualify Xilinx accelerator cards for Power-based systems. The alliance comes as Intel, whose Xeon CPUs have been steadily taking share from IBM's Power line, gets set to acquire Xilinx archrival Altera, with plans to offer integrated CPU/FPGA solutions for workload acceleration. In addition to IBM, Xilinx has partnered with Qualcomm, one of several chipmakers going after the budding ARM server CPU market.
- Also: 1) IBM claims using Power servers featuring Nvidia's (NASDAQ:NVDA) Tesla K80 GPU-based accelerators can deliver up to a 70% performance boost for certain Watson APIs, and increase its processing power up to 10x. 2) OEMs E4 Computer Engineering and Penguin Computing have unveiled new OpenPower servers. They run on IBM's high-end Power8 CPU and feature Tesla accelerators.
- The announcements come amid the supercomputer industry's SC15 conference. The first OpenPower servers became available earlier this year, via Taiwanese OEM Tyan. IBM's Power systems revenue fell 3% Y/Y in Q3, a smaller decline than in many recent quarters.
Oct. 14, 2015, 6:47 PM
- While its FQ2 sales missed estimates (EPS slightly beat), Xilinx (NASDAQ:XLNX) is guiding for FQ3 revenue to be up 3%-7% Q/Q. That implies a range of $543.4M-$564.5M, in-line with a $548.3M consensus and above at a $554M midpoint. That's going over well following multiple quarters of light guidance.
- Communications & Data Center sales (41% of total), under pressure in recent quarters thanks in part to weak Chinese base station demand, managed to rise 5% Q/Q, albeit while still dropping 19% Y/Y. Notably, Xilinx states "wired and wireless communications" chip sales rose. The Zyna-7000 programmable SoC line and 20nm UltraScale FPGAs were also strong points.
- Industrial, Aerospace, & Defense sales (also 41% of total) fell 12% Q/Q and Y/Y; defense was a weak spot. Broadcast, Consumer, & Automotive sales (18% of total) fell 3% Q/Q and rose 4% Y/Y.
- Helping EPS beat estimates: Gross margin was 70.1%, +20 bps Q/Q and -180 bps Y/Y, and slightly above a 69%-70% guidance range. FQ3 GM guidance is at 69%. Also helping GAAP operating expenses fell 8% Y/Y to $216.8M, and $100M was spent on buybacks.
- Shares have risen to $47.56 after hours.
- FQ2 results, PR
Xilinx, Inc. designs, develops and markets programmable devices and associated technologies, including: integrated circuits in the form of programmable logic devices, including programmable System on Chips and three dimensional ICs, or 3D ICs, software design tools to program the PLDs, targeted... More
Industry: Semiconductor - Specialized
Country: United States
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