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China Mobile Ltd. (ADR) (CHL), Cisco Systems, Inc. (CSCO), And One Company To Watch

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Maker of programmable chips Xilinx, Inc. (NASDAQ:XLNX) is up around 7% this year. While this year-to-date appreciation might not seem very handsome at first, Xilinx has a lot of potential to continue its steady progress going forward. The stock isn’t fashionable by any means, but it has the potential of providing stable returns driven by its diversified business.

Improvement all around

Its business has gradually improved, and Xilinx, Inc. (NASDAQ:XLNX) is not going to slow down any time soon as its end markets are getting better. Xilinx’s latest quarterly report tells us that the company recorded sequential gains in revenue, which grew 4% to $532 million on the back of an improvements in its Industrial, aerospace & defense and broadcast, consumer & automotive businesses.

Xilinx also trumped consensus estimates on the bottom line, posting adjusted earnings of $0.47 a share, up 24% on a sequential basis and ahead of the $0.45 estimate (according to Yahoo! Finance). More importantly, the company witnessed sales of its new products increase 86% from the year ago period, and they now account for 27% of total revenue. The solid growth in these new products is simply fantastic as they have helped Xilinx, Inc. (NASDAQ:XLNX) gain market share and also report better gross margin.

A number of catalysts

The company is relying on its new products to drive revenue in its communications and data center business. Xilinx states that the roll out of TD-LTE in China will provide a boost to its business in the second half of the year. Xilinx, Inc. (NASDAQ:XLNX) would probably begin ramping up production for TD-LTE chips in the second half of the year.

The company seems to have already landed design wins for TD-LTE infrastructure in the country and is waiting for actual deployment once its customers finish testing the equipment. For instance, China Mobile Ltd. (ADR) (NYSE:CHL) started its TD-LTE trials in Guangzhou and Shenzen earlier this year, and the carrier is aiming for an August roll out of 4G services.

China Mobile Ltd. (ADR) (NYSE:CHL) is expected to start releasing 4G-compatible devices later this year. Linking up the dots, China Mobile Ltd. (ADR) (NYSE:CHL) might be Xilinx, Inc. (NASDAQ:XLNX)’s customer, and if this is the case, it would be a huge advantage for the company, helping it gain a foothold in the vast Chinese cellular market with the help of the world’s largest mobile operator.

Xilinx’s industry leading 28-nanometer chip portfolio has been performing above expectations and the company has now readied a 20-nanometer solution. Moreover, Xilinx, Inc. (NASDAQ:XLNX) projects that sales of 28-nm chips will exceed $250 million in the current fiscal year, while the 20-nm chips would be tested by customers.

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