Programmable chip maker Xilinx Inc. (XLNX) said Wednesday after the markets closed that its second quarter profit fell 21% from last year, hurt by lower revenues and gross margins. The company also announced a 14%, or $0.02, increase in its quarterly cash dividend to $0.16 per share.
The San Jose, California-based company reported net income for the second quarter of $64.0 million or $0.23 per share, compared to $81.1 million or $0.29 per share for the year-ago quarter.
The latest quarter results include restructuring charges of $5.9 million, or $0.02 per share.
On average, 16 analysts polled by Thomson Reuters expected the company to earn $0.22 per share for the second quarter. Analysts' estimates typically exclude special items.
Gross margin for the second quarter fell to 61.9% from 63.3% a year earlier. Operating profit for the quarter decreased 34% to $82.1 million from $124.6 million in the prior year quarter.
Net revenues for the second quarter fell 14% to $414.95 million from $483.54 million in the same quarter last year. Second quarter net revenues grew 10% sequentially. Sixteen analysts had a consensus revenue estimate of $410.21 million for the second quarter.
Last month, Xilinx had raised its second quarter revenue outlook, citing a significant increase in sales of Virtex-5 chips and broad based strength across nearly all end markets and geographies. At that time, the company said it expected second quarter revenue to grow 10% sequentially, compared to its earlier forecast of a 2% to 6% sequential growth.
The company said Wednesday that new product sales increased 36% sequentially during the second quarter due mainly to strong growth from the Virtex-5 and Spartan-3 FPGA families.
"I am encouraged by the broad-based recovery in our business," said Moshe Gavrielov, Xilinx President and Chief Executive Officer. "Strong sales growth coupled with continued operating expense control contributed to a significant improvement in operating margin. September quarter operating margin was 20%, up from 15% in the prior quarter."
The company's North America revenue fell 10% year-over-year but grew 12% sequentially, while Asia Pacific revenue declined 8% from last year but increased 3% from the previous quarter and Europe revenue dropped 23% year-over-year but rose 15% sequentially. Japan revenue slipped 23% from a year earlier but climbed 26% from the prior quarter.
For the first six months of its fiscal year, the company reported net income of $102.0 million or $0.37 per share, compared to $164.2 million or $0.59 per share for the same period last year.
Net revenue for the first-half fell 19% to $791.19 million from $971.78 million in the prior year period.
Additionally, Xilinx announced a $0.02 increase in its quarterly cash dividend to $0.16 per share, payable on November 24, to all stockholders of record on November 4.
Looking forward, the company said it expects third quarter revenue to grow 6% to 10% sequentially, implying third quarter revenue of $439.85 million to $456.45 million. Analysts currently expect the company to post revenue of $422.45 million for the third quarter.
The company said it expects third quarter gross margin to be in the range of 62% to 63%.
Chip makers have suffered as the economic downturn reduced demand for personal computers, mobile phones and other electronics over the last year. However, the market is currently experiencing a slight improvement in demand.
Xilinx results came a day after Intel Corp. (INTC), the world's biggest chip maker, reported third quarter profit that fell 7.5% from last year but beat analysts' estimate. Intel also forecast fourth quarter revenue above analysts' current consensus estimate.
Xilinx shares, which have traded in a range of $14.28 to $24.49 over the past year, closed Wednesday's regular trading session at $24.00, up 7 cents but lost 20 cents in after hours trading.
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