Broadcom Fails to Impress Despite Solid Earnings Beat

By Chris Lange Published Dec 10, 4:53PM EST

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Broadcom Fails to Impress Despite Solid Earnings Beat — © Justin Sullivan / Getty Images

When Broadcom Inc. (NASDAQ: AVGO | AVGO Price Prediction) released fiscal fourth-quarter financial results after markets closed Thursday, the semiconductor maker reported $6.35 in earnings per share (EPS) and $6.47 billion in revenue. That compared with consensus estimates of $6.25 in EPS and revenue of $6.43 billion. In the same period last year, the company reported EPS of $5.39 on $5.78 billion in revenue.

Management noted that Broadcom delivered strong fourth-quarter revenue results through continued demand for networking from cloud and for broadband from service providers as well as the significant ramp in wireless, even as enterprise demand remained soft.

During the most recent quarter, total revenue increased 12% year over year. This consisted of Semiconductor Solutions revenues that increased 6% year over year to $4.83 billion and Infrastructure Software revenues that increased 36% to $1.64 billion.

At the end of the quarter, cash and cash equivalents totaled $7.62 billion, down from $8.86 billion at the end of the prior quarter.

The board of directors approved a quarterly cash dividend of $3.60 per share that is payable on December 31 stockholders of record at the close of business on December 21.

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Looking ahead to the fiscal first quarter, the company expects to see net revenues of $6.6 billion and adjusted EBITDA of $3.9 billion. Consensus estimates call for $6.37 in EPS and $6.52 billion in revenue for the quarter.

Broadcom stock closed Thursday at $410.04, with a 52-week range of $155.67 to $426.70. The consensus analyst price target is $416.00. Following the announcement, the stock was down over 2% at $399.50 in the after-hours session.

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About the Author Chris Lange →

Chris Lange is a writer for 24/7 Wall St., based in Houston. He has covered financial markets over the past decade with an emphasis on healthcare, tech, and IPOs. During this time, he has published thousands of articles with insightful analysis across these complex fields. Currently, Lange's focus is on military and geopolitical topics.

Lange's work has been quoted or mentioned in Forbes, The New York Times, Business Insider, USA Today, MSN, Yahoo, The Verge, Vice, The Intelligencer, Quartz, Nasdaq, The Motley Fool, Fox Business, International Business Times, The Street, Seeking Alpha, Barron’s, Benzinga, and many other major publications.

A graduate of Southwestern University in Georgetown, Texas, Lange majored in business with a particular focus on investments. He has previous experience in the banking industry and startups.