To: Donald Wennerstrom who wrote (2087 ) 2/21/2002 11:16:44 PM From: Return to Sender Respond to 6:36PM Xilinx (XLNX) 34.01 -3.32: This chipmaker is the leading gainer after the bell today, up 4%. Specifically, XLNX is a programmable logic device (PLD) supplier of FPGA and CPLD semiconductors. It's the leading supplier in the fast growing FPGA market and is the #3 competitor in CPLDs. The interest in the stock is being generated by the company saying MarQ revenues should be up approximately 10% sequentially largely due to strength in the Virtex-E and Virtex-II FPGA product families. The prior guidance given on January 17th was for low single digit sequential revenue growth, so this amounts to guidance for revenue of $251 mln versus the current consensus estimate of $237 mln. But it's not jus the top line. Gross margin should be 56% vs prior guidance of 54%-56%. Also, inventory days are expected to drop to less than 100 days from 131 days in the prior quarter while all geographies with the exception of Asia Pacific are expected to show sequential growth...Most chipmakers would be moving more aggressively on an announcement like this, but the company's heavy exposure to the communications sector and a rich valuation are concerns. The muted reaction is endemic of a problem in the semiconductor sector -- namely, that many chip stocks are still well above their September lows and have already priced in good news for the sector. The lesson here is to not expect too much from the group even if they guide higher. Also consider Intel's (INTC 29.48 -1.96) weakness today after its estimates were cut by Banc of America. Despite two major firms coming to it defense, the stock still sold off 6% and broke its 200-day ma. The path of least resistance is still to the downside. -- Robert J. Reid, Briefing.comfinance.yahoo.com
