SAN FRANCISCO—Fabless chip vendor Broadcom Corp.'s stock value declined by more than 7 percent in after hours trading Tuesday (April 26) after the company reported a first quarter profit and second quarter guidance that disappointed analysts.
Programmable logic vendor Altera Corp., which also reported first quarter results Tuesday, saw its shares gain slightly in after hours trading though the company's first quarter sales came in just slightly below consensus analysts' expectations.
Broadcom's stock declined by more than 7.6 percent to trade at $37.33 late Tuesday afternoon, after closing at $40.41 ahead of the earnings report.
Broadcom (Irvine, Calif.) reported first quarter sales of $1.82 billion, down 7 percent from the fourth quarter of 2010 and up 24 percent from the first quarter of 2010. The company posted a net income in accordance with generally accepted accounting principles (GAAP) of $228 million, or 40 cents per diluted share, down 14 percent from the previous quarter and up 9 percent compared to the year-ago quarter.
Broadcom's first quarter sales narrowly beat consensus' analysts' expectations, which called for first quarter sales of $1.81 billion and non-GAAP earnings of 59 cents per share. Broadcom did not report a non-GAAP earnings per share figure.
Broadcom reported a cost of product revenue of $895 million, up 29 percent from the first quarter of 2010. R&D costs jumped 18 percent compared to the year-ago quarter and selling, administrative and general expenses increased by 35 percent year-to-year, Broadcom said.
"Broadcom reported solid results for the first quarter, with revenue above the mid-point of guidance and better-than-expected profitability," said Scott McGregor, Broadcom's president and CEO, in a statement. McGregor added that Broadcom notched a record number of design wins during the first quarter.
For the current quarter, Broadcom said it expects revenue to be roughly flat, between $1.75 billion and $1.85 billion. Consensus analysts' expectations had pegged Broadcom's second quarter revenue at $1.9 billion, according to Yahoo Finance.
Altera (San Jose, Calif.) reported first quarter sales of $535.8 million, down 4 percent from the fourth quarter of 2010 and up 33 percent from the first quarter of 2010. Altera's first quarter net income was $224.1 million, or 68 cents per diluted share, down 3 percent from the previous quarter and up 46 percent compared to the year-ago quarter.
Altera's first quarter sales came in slightly below consensus analysts' expectations, which called for sales of $536.6 million and net income of 65 cents per share, according to Yahoo Finance.
Altera said its sales of new products increased 13 percent sequentially.
John Daane, Altera's president, chairman and CEO, said in a statement that the company experienced double-digit sequential growth in 40-nm products and said that the company's first 28-nm Stratix V FPGAs—which pack up to 3.9 billion transistors—are now shipping.
Altera said it expects revenue for the current quarter to be flat to up 5 percent. Consensus analysts' expectations had pegged Altera's second quarter revenue at $533 million, according to Yahoo Finance.
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