What led to Xilinx, Inc. (NASDAQ: XLNX) stock crash

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Xilinx, Inc. (NASDAQ: XLNX) stock fell over 9.5% on 29th January, 2020 (As of 12:31 pm GMT-5; Source: Google finance) though the company reported fourth-quarter guidance below consensus estimates and mixed results for the third quarter of FY 20. The company has reported fiscal third-quarter net income of $162 million, compared to $239.2 million, in the year-ago period.

XLNX in the third quarter of FY 20 has reported the adjusted earnings per share of 68 cents, while reported 10 percent fall in the adjusted revenue to $723.5 million in the third quarter of FY 20, missing the analysts’ estimates for revenue of $731.3 million.

Moreover, the Advanced Products category formed approximately 70% of total revenues in the third quarter, which represents a decline of 4% year-over-year. Zynq-based revenue rose 26% year-over-year, despite the impact of a weaker Wired and Wireless business. The Zynq SoC platform, which includes Zynq at 28 nanometer and both MPSoC and RFSoC at 16 nanometer, formed 23% of total revenues, which is higher than the year ago period. In the Communication markets, the company is actively engaged with a global non-Chinese OEM for second-generation 5G radio design that includes beam forming and is based on the company’s 7 nanometer Versal ACAP. In the Data Center, Alibaba Cloud has announced that XLNX is powering the data center and is being used by their cloud services enterprise customers.

Additionally, the company has declared a quarterly cash dividend of $0.37 per outstanding share of common stock, which will be payable on February 20, 2020 to all stockholders of record at the close of business on February 11, 2020.

For the fiscal fourth quarter, the analysts project earnings to be of 81 cents on sales to be of $825.1 million. The company expects fiscal fourth-quarter revenue to be in the range of $750 million to $780 million.

In addition, XLNX has announced cost-saving measures to drive structural operating efficiencies across the company. Xilinx intends to reduce its global workforce by approximately 7% through a targeted reduction in force and meaningfully slower hiring to replace attrition. Further, the company is taking other measures to reduce operating expenses, that includes further reduction of discretionary spend and targeting additional operating efficiencies across the business. As a result of these measures, Xilinx projects to generate non-GAAP cost and operating expense savings of about $17M to $20M in the fourth quarter.  The company expects to incur a GAAP pre-tax charge of about $25M to $30M in the fourth quarter of fiscal 2020 mainly related to severance pay expenses.

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