This week Xilinx and Altera released their September results (Q2FY10 and Q3FY09 respectively). The bottom line is shown below (all numbers in $M).


Source: Xilinx and Altera financial reports, and Yahoo! Finance

Xilinx’ quarterly income of $64M (0.23$/share) beats Wall Street’s expectation of 0.19$/share. Altera’s quarterly income of $56.7M (0.19$/share) meets Wall Street’s expectation. Both companies expect a 6-10% revenue increase for Q4’09 from previous quarter. Xilinx expects its Q4’09 gross margin to improve to 62-63%, and Altera sees his to be 67-68%.

Both companies are benefiting equally of an improving economy. Altera is seeing a large part of its revenue coming from new products (60% for Q3’09), as opposed to Xilinx (31% in Q3’09).

I would give a slight edge to Altera, given its recent offer of high-performance new devices, and its operation margin consistently ahead of Xilinx’. One day Xilinx should be able to close the 3-4% operation margin gap it has with Altera, but until then it will not be as efficient and dynamic as Altera. I will discuss in another post how Xilinx can close this gap.

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1 Comment on What to read in Xilinx’ and Altera’s third quarter results

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