What happened

Shares of programmable microchip maker Xilinx (NASDAQ:XLNX) were soaring on Thursday, rising as much as 15.7% just before 10 a.m. EDT. Lifted by a strong earnings report for the second quarter of fiscal year 2019, the stock stayed aloft at a 15.5% gain as of 2 p.m.

A technician installs a microchip on a circuit board with the help of tweezers.

Image source: Getty Images.

So what

Second-quarter sales rose 20% year over year to land at $746 million. Adjusted earnings stopped at $0.87 per diluted share, 34% above the year-ago period's result. Your average analyst would have settled for earnings of $0.76 per share on revenue in the neighborhood of $710 million.

Looking ahead, Xilinx's management expects third-quarter revenue to grow roughly 22% above the third quarter of fiscal 2018, adding up to approximately $770 million. The Street had been looking for $720 million.

Now what

In a conference call with financial analysts, CEO Victor Peng gave a verbal high-five to his company's communications division. That segment led the way with revenues 23% above the year-ago result, as Xilinx is staking a claim in the brand-new 5G wireless market.

This led Peng to say: "Communications was very strong in Q2, driven by LTE upgrades, pre-5G, and some early 5G deployments. Our wireless business grew very significantly with broad-based strength in both radio and baseband applications with major OEMs across multiple geographies, and we resumed shipping to ZTE."

So it's a classic beat-and-raise performance, enhanced by signs that Xilinx is unlocking several additional growth drivers right now. The enthusiastic market reaction to all of this good news should come as no surprise.