Xilinx, Other Semiconductor Companies Guide Down For June Quarter By Investors Business Daily
Programmable-chip maker Xilinx (XLNX) has joined other semiconductor companies in guiding analysts lower for the June quarter because of business disruptions from the coronavirus pandemic and a likely recession. Xilinx stock fell on Thursday.
Xilinx late Wednesday reported in-line to slightly better-than-expected results for its fiscal fourth quarter ended March 28. But it badly missed Wall Street’s targets with its current-quarter outlook.
San Jose, Calif.-based Xilinx earned 78 cents a share on sales of $756 million in the March quarter. Wall Street was modeling Xilinx earnings of 78 cents a share on sales of $752 million. On a year-over-year basis, earnings dropped 17% while sales declined 9%. It was the second straight quarter of sales and earnings declines for Xilinx.
For the June quarter, Xilinx guided to earnings of 56 cents a share on sales of $690 million. That’s based on the midpoint of its outlook. Analysts were looking for earnings of 72 cents a share on sales of $738 million. In the year-earlier period, Xilinx earned 97 cents a share on sales of $850 million.
Xilinx Stock Drops On Weak Outlook
“We think that the spread of the Covid-19 virus is impacting most electronics end markets,” Nomura Instinet analyst David Wong said in a note to clients. “We continue to believe that the long-term growth drivers of Xilinx’s business remain intact.”
Wong reiterated his buy rating on Xilinx stock with a price target of 105.
Xilinx stock dropped 3.8% to close at 87.13 on the stock market today.
Xilinx makes programmable chips for a range of applications. It serves such markets as aerospace, defense, industrial, automotive, broadcast, data center, wired and wireless communications.
Other semiconductor companies guiding down for the June quarter this week included STMicroelectronics (STM) and Texas Instruments (TXN).
TI Beats Q1 Targets But Warns On Recession
Late Tuesday, Texas Instruments reported first-quarter earnings of $1.24 a share on sales of $3.33 billion. Analysts expected TI earnings of $1.01 a share on sales of $3.18 billion. On a year-over-year basis, earnings dipped 2% while sales fell 7%.
It was the sixth straight quarter of declining sales for TI as it navigates the current semiconductor down cycle. Earnings have fallen for four consecutive quarters. It forecast continued declines for both metrics in the current quarter, citing the likely “Covid-19 recession.”
TI expects to earn 84 cents a share on sales of $2.9 billion in the June quarter. That’s based on the midpoint of its outlook. Analysts were forecasting TI earnings of $1.03 a share on sales of $3.19 billion. In the year-earlier quarter, it earned $1.36 a share on sales of $3.67 billion.
TI lost 1.4% to close at 110.46 Thursday.
STMicroelectronics Misses First-Quarter Targets
On Wednesday, Geneva-based STMicroelectronics reported first-quarter earnings of 21 cents a share on sales of $2.23 billion. Analysts were looking for ST earnings of 22 cents a share on sales of $2.29 billion. On a year-over-year basis, ST earnings rose 5% while sales increased 7%.
For the second quarter, ST expects to generate sales of $2 billion, vs. the consensus estimate of $2.12 billion.
In a news release, STMicroelectronics said “the declining demand environment, especially in automotive,” as well as government regulations during the coronavirus pandemic, will negatively impact its second-quarter results.
ST gained 1.5% to 23.64 Thursday.
Xilinx stock ranks No. 12 out of 31 semiconductor companies in IBD’s Electronics-Semiconductor Fabless industry group, according to the IBD Stock Checkup tool. Meanwhile, ST is fifth out of 31 semiconductor companies in IBD’s Electronics-Semiconductor Manufacturing group. TI ranks eighth in the chipmaker industry group.
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