Broadcom not threatened by Samsung's CSR buy
7/25/2012 12:29 AM EDT
Q2 sales, profit and Q3 guidance
Broadcom (Irvine, Calif.) reported record second quarter sales of $1.97 billion, up 8 percent from the previous quarter and up 10 percent compared with the second quarter of 2011. The company reported a net income in accordance with generally accepted accounting principles (GAAP) of $160 million, or 28 cents per diluted share, up 82 percent from the previous quarter but down 9 percent compared with the year-ago quarter.
On a non-GAAP basis, excluding charges, Broadcom report a net income of $435 million, or 72 cents per diluted share, up 12 percent from the previous quarter and up 4 percent compared with the year-ago quarter.
Broadcom's results exceed consensus analysts' expectations, which called for sales of $1.95 billion and non-GAAP earnings of 67 cents per share, according to Yahoo Finance.
For the third quarter, Broadcom said it expects sales to increase to between $2 billion and $2.15 billion, an increase of 2 to 9 percent sequentially. The sales target was in line with consensus analysts' expectations of about $2.11 billion, according to Yahoo Finance.
Analysts generally applauded Broadcom's second quarter performance and third quarter sales target. While many chip companies have hit the low end of second quarter expectations and guided for third quarter sales below prior expectations, "we would characterize Broadcom's earnings as a diamond in the rough," said Gary Mobley, an analyst with Benchmark Capital, in a report circulated Wednesday.
"Broadcom shares could see a boost as most investors feared far worse," Mobley wrote. But Mobley left intact Benchmark's "hold" rating on Broadcom's stock and reduced his firm's price target for the shares to $32 from $38. Shares of Broadcom traded at $33.69 in mid-day trading Wednesday, up nearly 10 percent from Tuesday's closing price.
Also Tuesday, Broadcom introduced a combo chip for smartphones, tablets, ultrabooks and other mobile devices. The BCM4335 integrates a complete 5G Wi-Fi system including the MAC, PHY and RF with Bluetooth 4.0, FM radio and software on a single chip using 40-nm CMOS process, Broadcom said. The BCM4335 is now sampling to Broadcom's early access customers, with full production expected in the first quarter of 2013, Broadcom said.
McGregor said the BCM4335 "builds on a franchise that has shipped over 1 billion wireless combo chips to date."