It's good to be a world leader. As for Xilinx (NASDAQ:XLNX), it leads the way in programmable logic solutions, and yesterday's blowout quarterly results demonstrate that this leader is performing like a champ.

For the fiscal third quarter, sales surged to $365.5 million, which was up 29% from the same period last year. Analysts, for what it's worth, thought the company would hit about $341 million. Of course, where there are sales, one hopes to find profits. Indeed, net income came in at $69.4 million, or 19 cents a share, beating expectations by a penny.

On the earnings call, Xilinx indicated that the growth is not a short-term spurt, and that the business is hitting on all cylinders. And management's thrift is paying off, as reflected in a jump in gross margins to 62% from 59% last year. Operating margins increased from 19% to 23%. Clearly, increased demand at companies such as Lucent (NYSE:LU), IBM (NYSE:IBM), Cisco (NASDAQ:CSCO), and Nortel (NYSE:NT) is spilling into the coffers of Xilinx.

In the ulta-competitive world of technology, take nothing for granted, but Xilinx has spent a considerable amount on R&D to maintain its advantage. Last December, for example, the company launched its new architecture for rapid development and deployment of programmable logic solutions.

Solid new products and a rising market are always a great combination. It should be no surprise that the company upped its guidance for the quarter ended March, with revenues growing sequentially from 7% to 10% -- or that investors headed to the after-hours market to celebrate.

Tom Taulli is the author of six books on investing, including The Complete M&A Handbook (Random House).