(Bloomberg) — Xilinx Inc., the chipmaker in takeover talks with Advanced Micro Devices Inc., reported earnings that beat Wall Street estimates and said revenue will start rowing again in the current period.Sales will be $750 million to $800 million in the three months ending in December, the San Jose, California-based company said. Revenue even at the low end of the forecast would represent the company’s first quarter of year-over-year growth in five such periods. Analysts on average projected $774 million.Xilinx Chief Executive Officer Victor Peng is trying to spread the use of his company’s products into new areas such as data centers while combating the impact of disappearing sales to Huawei Technologies Co. and the global pandemic. The company is also negotiating a possible takeover by AMD, according to people familiar with the matter. Xilinx executives, speaking on a conference call, declined to discuss the potential deal.The chipmaker is confident the effort to push into data centers can sustain double-digit growth, even if orders are “choppy,” Peng said. Xilinx reported that data center sales were up 30% in the fiscal second quarter and now account for 14% of the company’s total revenue. “The data center market is being disrupted and we offer a lot of value,” he said in an interview.While Xilinx sales come primarily from industrial and communications equipment makers, it’s carving out a new niche in supplying owners of large data centers who use the chips to accelerate certain workloads. Its field programmable gate arrays, or FPGAs, are unique in that they can have their function changed by software even after they’ve been installed in computers and other devices.AMD is trying to restore its fortunes in the data center processor market, clawing its way back from less than 1% market share and gaining share from Intel Corp. with new products.The loss of Huawei as a customer due to U.S. trade restrictions and Covid-19 have hurt Xilinx’s expansion plans, but long-term the company remains on track to achieve overall sales growth of more than 10% a year, Peng said.Xilinx shares rose 1.8% in extended trading after reporting results. Earlier, the stock closed at $111.30 in New York and has gained 14% this year, pushing the company’s market value to $27.2 billion.In the fiscal second-quarter, sales declined 8% to $767 million. Net income was $194 million, or 79 cents a share, compared with $227 million, or 89 cents, in the same period a year earlier. Profit, excluding some items, was 82 cents a share, ahead of analysts’ estimates.(Updates with CEO comments beginning in the fourth paragraph.)For more articles like this, please visit us at bloomberg.comSubscribe now to stay ahead with the most trusted business news source.©2020 Bloomberg L.P.

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