Xilinx Inc.'s (XLNX) fiscal first-quarter profit fell 2.7% as higher operating expenses cut into the programmable-chip maker's margins.
Shares were off 2.2% at $32.46 after-hours Wednesday, though the company reported better-than-expected revenue. The stock had climbed 17% over the past year through the close.
Xilinx--which makes chips used in cellphone base stations, network routers, DVD players and cable modems--has reported strong revenue growth over the past year on climbing sales to the communications end-market, its largest top-line contributor.
For the quarter ended July 2, Xilinx reported a profit of $154.4 million, or 56 cents a share, down from $158.6 million, or 58 cents a share, a year earlier. Analysts polled by Thomson Reuters had expected 53 cents.
Revenue rose 3.5% to $615.5 million. In April, Xilinx's upbeat forecast called for $587.9 million to $611.4 million.
Gross margin narrowed to 63.7% from 65% amid higher costs.
Sales of new products jumped 35% on strong demand for its models in its Virtex-6 and Spartan-6 families.
Sales to the data processing end-market rose 28%. Japan was the company's strongest segment geographically, with revenue up 29%, while North America posted a 6% decline.
Looking ahead to the second-quarter, the company projected second-quarter sales ranging from a 3% drop to a 1% increase from the first quarter, which is between $597 million to $621.6 million. Analysts most recently expected $602 million, according to a poll by Thomson Reuters.
-By Drew FitzGerald, Dow Jones Newswires; 212-416-2909; Andrew.FitzGerald@dowjones.com