February business update:
Salomon Smith Barney
March 01, 2000
Current rank: 1H
Target price: $100
Xilinx gave its customary monthly business update today and was very bullish:
Xilinx (XLNX, 1H) has enjoyed very strong business conditions quarter to date. The company a month ago raised its sequential sales growth outlook from 7% to 9%. After February, it now appears that 10% sequentially is realistic and we believe there is very good upside potential above that figure.
The communications sector is leading the charge for Xilinx, including major production orders for Virtex high-end devices. Additionally, sales of mature devices, such as the XC4000 family, continue to be strong, as the typical 3 year end-product life cycle is extending to 5 years, in many cases.
Xilinx is executing its sales strategy, growing relationships at global customers while increasing its broad customer base. Sales to the communications end market will likely top 70% of total revenues for the March quarter. Indeed, all product lines are expected to grow in the quarter and all geographic regions are strong.
We believe the company has the best product position in the Programmable Logic Device market, and we continue to find Xilinx as one of the most attractive stocks in our coverage universe. |
