Xilinx Q2 revenue beats expectations on strength in data center, rebound in Europe

Programmable chip maker cites economic recovery, and health in markets including automotive and wireless.

Programmable chip maker Xilinx this afternoon reported Q2 revenue and profit that topped analysts' expectations, and forecast the current quarter in line with Wall Street's estimates. 

The company saw solid growth in North American and Europe, and a big surge in the company's sales into data center computers. 

Xilinx's results were "buoyed by the economic recovery," said chief executive Victor Peng in prepared remarks.

The company noted in its release that "Sequential strength was driven by improvement in the Automotive end market and 5G ramp in the Wireless end market."

Xilinx has been the subject of rumors in recent weeks that the company is in talks to be bought by Intel competitor Advanced Micro Devices. There was no reference of any kind to M&A in tonight's release. 

Xilinx makes chips called field-programmable gate arrays, which consist of a collection of generic circuits that can be rewired to morph the chip to suit different applications. The parts are often used for the most cutting-edge applications, including base station equipment for 5G networks.

Revenue in the three months ended in September was down 8%, year over year, at $767 million, but was higher than the $757 million average estimate of Wall Street analysts, and 5% higher than the company's revenue in the prior quarter.

EPS of 82 cents, on a non-GAAP basis, was five cents higher than expected. 

Also: Xilinx FYQ1 in-line, shares sag; CEO Peng trumpets recovery in multiple markets

For the current quarter, the company projected revenue in a range of $750 million to $800 million, which would be right in line with consensus for $774 million. The company's gross profit margin forecast, 67.5% to 70.5%, is also in line with what analysts have been expecting. 

Xilinx's biggest improvement by geography came in Europe, where its sales soared by 47% from Q1's level, and were 10% higher than the prior-year period. Sales in North America rose 20% from Q1.

By product line, the company's strongest growth was for its data center products. Data center revenue, which makes up 14% of total revenue, rose by 23% from Q1 and by 30% from the prior-year period.

Xilinx shares rose fractionally in late trading to $111.60.