Xilinx Falls as Chipmaker Forecasts Bigger Sales Drop

Xilinx Inc. fell more than 5 percent in extended trading after the chipmaker said sales will decline as much as 9 percent in the third quarter from the previous three months because of weak demand.

Xilinx, based in San Jose, California, had said revenue would fall as much as 4 percent. The new prediction indicates sales of as little as $563.9 million in the period. Analysts estimated revenue of $606.9 million, the average projection in a Bloomberg survey.

The company, whose programmable chips are used in communications equipment, said in a statement today the lower sales forecast was the result of weaker-than-expected demand from “a few large communications customers, specifically in the wireless segment.”

Orders for Xilinx’s and Altera Corp.’s chips are an indication of future demand for phone and networking machinery.

Communications sales will resume growth in the quarter that ends in March, Xilinx said in the statement.

Xilinx dropped $1.56 to $26.83 in extended trading after the announcement. The stock rose 28 cents to $28.39 in regular Nasdaq Stock Market trading, for an increase of 13 percent this year.

To contact the reporter on this story: Ian King in San Francisco at ianking@bloomberg.net

To contact the editor responsible for this story: Tom Giles at tgiles5@bloomberg.net]

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