First Albany Downgrades Xilinx
First Albany downgrades Xilinx (XLNX ) to neutral from buy.
Analyst Auguste Richard says better-than-expected revenues were completely offset by lower-than-expected gross margin of 61.1% (that was 90 basis points below his model) and higher-than-expected selling, general, and administrative spending.
He ties gross margin weakness to a richer mix of lower yielding new products. He also, notes the company's 19 cents earnings per share missed his and the consensus estimate by a penny due to a higher-than-expected tax rate.
Richard believes the semiconductor industry will continue to slow going into the summer. He maintains his 21 cents first-quarter earnings per share estimate, cuts his 93 cents fiscal 2006 (ending March) to 90 cents, and sets a $1.12 fiscal 2007 estimate.
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