For the current quarter, Xilinx expects sales of $710 million to $740 million, or $725 million at the midpoint. Wall Street thought the company would earn 88 cents a share on sales of $847 million in the December quarter. In the year-earlier period, Xilinx earned 92 cents a share on sales of $800 million.

Chief Executive Victor Peng said Xilinx exceeded expectations in the first half of the year despite a "challenging business environment driven by global trade disputes. Its challenges included US restrictions on sales to China telecom gear maker Huawei.

"However, we are seeing a combination of headwinds in the second half related to continuing business restrictions, weaker demand for communications products and macro-related weakness offsetting strong overall growth in the data centre and improvement across our core vertical markets", Peng said.

Xilinx believes its fiscal third quarter will be a low point. It expects to see a return to sequential revenue growth in its fiscal fourth quarter, which ends in March.

"Despite the weaker third quarter, we expect the fiscal year 2020 revenues to grow approximately six per cent compared to the fiscal year 2019", Peng said.

The company predicted fiscal 2020 sales of $3.21 billion to $3.28 billion, or about $3.25 billion at the midpoint. Analysts looked for full year sales of $3.4 billion, Zacks said.