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Xilinx's Revenue Forecast Below Wall Street Estimates; Blames Trade War

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Xilinx's Revenue Forecast Below Wall Street Estimates; Blames Trade War

Xilinx (NASDAQ: XLNX), San Jose based chipmaker, has published its revenue forecast for the current quarter and next financial year well below the Wall Street estimations.

What Happened

The chipmaker company reported that it expects revenue numbers between $710 million to $740 million in the third quarter and between $3.21 billion to $3.28 billion for the next fiscal year. 

Wall Street analysts had predicted an average revenue of $844.9 million for the third quarter and $3.4 billion for the upcoming year, according to Reuters.

Texas Instruments (NASDAQ: TXN), another prominent chipmaker, shared a similarly bleak outlook on Wednesday.

Xilinx said that its dismal prediction has resulted from the uncertainty over its business with Huawei (SHE: 002502). 

The U.S. Department of Commerce put Huawei on the trade blacklist in May, forbidding all U.S. companies to collaborate with the Chinese technology giant.

Xilinx has resumed some sales with Huawei since the ban, Reuters reports. However, the company has excluded all revenue possibilities with Huawei from its forecast.

What’s Next

Earlier this week, Chinese officials have indicated that the talks with the U.S. over trade war are making progress. The leaders of the two countries, Xi Jinping and Donald Trump, are expected to sign an agreement at the Asia-Pacific Economic Forum next month in Chile.

"We really hope that the governments can come to [an] agreement and resolve this structural issue so we can continue to engage with Huawei,” Xilinx’s chief executive officer Victor Peng said in a statement to Reuters.

U.S. Treasury Secretary Steve Mnuchin, however, has said in an interview with CNBC that the Huawei issue is separate from the trade war. It remains to be seen if restrictions on the company would be eased as part of an agreement between the two countries.

Price Action

Xilinx’s shares were trading at 2.24% down following the forecast.

 

Posted-In: Earnings Government News Regulations Events Global Top Stories Economics Best of Benzinga

 

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