Computer chipmaker Xilinx Inc. today topped expectations on earnings and revenue as it delivered its fiscal first-quarter results.

The company, which makes chips for the aerospace and defense industries as well as for servers and consumer products, reported a profit before certain costs such as stock compensation of 65 cents per share on revenue of $727 million for the quarter. That was better than expected, Wall Street having forecast earnings of just 56 cents per share on revenue of $725.6 million.

The highlight of the quarter was Xilinx’s Data Center Group, which delivered record revenue growth of 104% in the quarter. Meanwhile, Xilinx’s Wireless Group delivered 27% sequential revenue growth.

Xilinx President and Chief Executive Victor Peng (pictured) said in a statement that the company also benefited from strong sales in its Aerospace and Defense, Industrial, and Test and Measurement group, which helped offset headwinds in its Automotive and Broadcast businesses.

“Our fiscal Q1 revenue was well above the initial guidance despite ongoing business challenges from COVID-19 and global trade issues,” Peng said. “The outperformance was due to a combination of strength in multiple end markets, as well as some order acceleration driven by recent additional U.S. government trade restrictions on sales of certain Xilinx products to some customers based, or with operations, in China.”

Peng was referring to a decision by the U.S. Department of Commerce in June to ease some restrictions on the sale of its technology to Chinese firms. The company benefited as it received a rush of orders from China following that decision, causing it to raise its initial outlook for the quarter on June 29.

However, Peng told ZDNet in an interview that the company now expects a period of “digestion” of orders in the next quarter that could hold back new sales for data center and networking chips.

Nevertheless, the company is being somewhat optimistic with its guidance for the next quarter. Officials told analysts in a conference call they’re expecting second-quarter revenue of $730 million to $780 million, which is well ahead of the average analyst estimate of $729.3 million in revenue.

“Our diversified end markets remain a key strength, and our business continues to perform better than expected even after our revised guidance,” said Xilinx Chief Financial Officer Brice Hill. “We continue to be well-positioned to capitalize on opportunities across all our end markets.”

Still, Xilinx’s stock fell 3% in after-hours trading following the report.

Photo: Xilinx/Facebook