SAN FRANCISCO—Chip vendor Broadcom Ltd. Thursday (Dec. 8) reported a net loss of $668 million on sales of $4.14 billion for the fiscal fourth quarter, which closed Dec. 1.
The net loss was wider than the net loss of $315 billion Broadcom reported in the fiscal third quarter. Sales, however, increased by 9 percent, Broadcom said.
The company did report a GAAP net income from continuing operations of $3.47, exceeding analysts expectations.
Broadcom said it expects sales for the fiscal first quarter of 2017 to be between $3.9 billion and $4.8 billion. The company said it expects capital expenditures for the fiscal first quarter to be roughly $330 million.
For fiscal 2016, Broadcom (Singapore) reported a net loss in accordance with generally accepted accounting principles of $1.86 billion on sales of $13.24 billion.Sales for the fiscal year improved by 92% compared to fiscal 2015, prior to the acquisition of Broadcom Corp. by Avago Ltd., creating Broadcom Ltd.
“Fiscal 2016 was a very transformational year for our company, as we complete the integration of Broadcom Corp.,” said Hock Tan, Broadcom president and CEO, in a conference call with analysts following the quarterly report.
“Since closing the acquisition at the start of the fiscal second quarter, we have made great strides in integration classic Broadcom,” Tan said.
The merger of Avago Ltd. and Broadcom Corp., structured as an acquisition by Avago of Broadcom, closed in February. The deal roughly doubled the annual revenue of the company, which adopted the name Broadcom Ltd.
Last month, Broadcom announced it would acquire Brocade Communications Systems for $5.9 billion.The deal is expected to close next year.
Tan said Broadcom maintains reserves for the potential pursuit of additional merger and acquisition opportunities, allowing the company to return capital to shareholders.
“Looking at 2017 and beyond, we expect our business to be continuing to be sustainable and in fact become much more profitable,” Tan said. He added that the company was raising its long-term operating margin to a forecast of 45 percent, a significant increase from Broadcom’s previous model.