Merrill Lynch says Xilinx 's (XLNX) back-end is loaded, and rates the company as near-term and long-term strong buy.
Analyst Chris Danely says business trends for the company's third quarter are strong; sequential revenue forecast is at the high end of the previously expected range of 6%-8%.
However, the company expects day sales outstanding (DSOs) to remain flat at 50 days due to non-linear shipments. This means Xilinx expects a back-end loaded quarter -- due to higher than expected demand for the company's Virtex-II and Virtex-E products (a combined 40% of fourth quarter revenues), which is causing longer than expected lead times.
Nonetheless, Danely thinks Xilinx is experiencing a quicker recovery than competitors due to superior product positioning at original equipment manufacturers.