Last updated: March 2, 2023 at 4:31 p.m. ET
First published: March 2, 2023 at 4:25 p.m. ET
Broadcom Inc. continued to deliver better results and forecast better near-term sales than Wall Street expects without providing long-term guidance on Thursday, and shares rose in extended trading.
Broadcom AVGO reported fiscal first-quarter earnings of $3.77 billion, or $8.80 per share, on sales of $8.91 billion, up from $7.71 billion a year ago. After adjusting for stock-based compensation and other costs, Broadcom reported earnings of $10.33 per share, compared with $8.39 per share in the same quarter last year.
Analysts…
Broadcom Inc. continued to deliver better results and forecast better near-term sales than Wall Street expects without providing long-term guidance on Thursday, and shares rose in extended trading.
Broadcom
AVGO
reported first-quarter earnings of $3.77 billion, or $8.80 per share, on sales of $8.91 billion, compared with $7.71 billion a year ago. After adjusting for stock-based compensation and other costs, Broadcom reported earnings of $10.33 per share, compared with $8.39 per share in the same quarter last year.
Analysts on average had expected adjusted earnings of $10.17 per share on revenue of $8.9 billion, according to FactSet. The shares rose more than 1% in after-hours trading immediately after the earnings release, after rising 0.9% in the regular session to close at $598.65.
Broadcom’s stock held up better than others in the semiconductor sector, which has been plagued by a chip shortage that suddenly turned into a glut over the past year. Broadcom showed it wasn’t immune to these issues in its latest quarterly report as the San Jose, Calif.-based chipmaker announced a limited outlook and declined to comment on the rest of the market. year or to update analysts on its product backlog. .
Broadcom “is not immune to cyclical headwinds,” analysts Raymond James warned as they initiated coverage of semiconductor companies this week. “In particular, he has around 30% exposure to enterprise (including semi-finished and software) and around 20% to wireless (primarily Apple
AAPL
), where there is a potential slowdown in demand. The upside looks modest even in a soft landing scenario.
In Thursday’s report, Broadcom reported second-quarter revenue of about $8.7 billion, while analysts on average had expected $8.58 billion, according to FactSet. Executives again shunned a full year forecast, with Chief Executive Hock Tan sticking to his approach of only projecting “growth”.
“Broadcom’s first quarter performance reflects continued strength in infrastructure demand in all of our end markets,” Tan said in a statement. “Looking forward, we believe our growth will be driven by continued leadership in next-generation technologies across all of our core markets and strong partnerships with our customers.”
Tan’s attempt to diversify the business beyond semiconductors helped avoid the slump in the chip business at that time. Broadcom also sells enterprise-wide networking equipment and storage systems, as well as a software division formed by the acquisitions of CA Inc. and Symantec, along with VMware Inc.
vmw
is expected to join in October.
Broadcom’s chip division – which includes networking and storage businesses – is the largest, with fiscal first-quarter revenue of $7.11 billion on Thursday, up from $5.87 billion. dollars a year ago and exceeding the average analyst estimate of $7.01 billion, according to FactSet. The software sector posted sales of $1.81 billion, up from $1.83 billion a year ago and missing the average analyst estimate of $1.85 billion, per FactSet.
Broadcom shares have gained 1.9% in the past 2 months, as the S&P 500 index
SPX
fell 9.9% and the PHLX Semiconductor Index fell 12.4%.