ALTR Altair Engineering Inc

Xilinx, Inc.(XLNX) has revised its guidance for the September quarter. Xilinx now expects sales to be down 7–10% compared to the previous guidance of sales to be up 1% to down 3% sequentially.

The weaker-than-expected sales growth during the quarter was driven primarily by the can be traced back to Communications and Industrial and other categories.

The new guidance implies sales between $553 million and $572 million compared to the sales guidance between $621.7 million and $597.0 million guided previously.

Earlier, rival chipmaker Altera Corp. (ALTR) downgraded its sale guidance for the third quarter of 2011 due to weaker demand in several verticals markets including Telecom and Wireless (particularly outside Asia). 

Xilinx continues to expect gross margin of around 63%, which is lower than the second quarter, primarily due to the faster-than-anticipated ramp of Virtex-6 and Spartan-6.

Operating expenses are now projected to come at around $208 million, including approximately $2 million of amortization of acquisition-related intangibles and approximately $4 million in restructuring charges. This is lower than the previous estimate of $218 million primarily due to lower variable expense and the timing of development expense, including labor, and lower-than-anticipated restructuring charges.

Earlier, Xilinx had posted net income of $154.4 million or $0.56 per diluted share in the first quarter of fiscal 2012, down 4% sequentially and 3% year over year. However, the result beat the Zacks Consensus Estimate of $0.53 per share. Sales of $615.5 million were up 5% sequentially and 3% year over year, and above management’s guided range of $587.9–$611.4 million.

The current Zacks Consensus Estimate is $2.11, down by almost $0.05 in the last thirty 30 days. We expect some downward revisions in the consensus earnings estimate to incorporate the downgrade in guidance provided by the company’s downgraded guidance.

As of now, we maintain a Neutral recommendation on the stock, which Our Neutral recommendation is supported by a Zacks #3 Rank, which that translates into a short-term rating of Hold. 

 
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