BRCM reported earnings 3 cents better than expected:
NEW YORK (Dow Jones)--Broadcom Corp. (BRCM) continued its frenzied growth in the second quarter, taking advantage of the rapidly expanding market for broadband chips.
The company reported that revenue rose 157% to $116.3 million from $45.2 million last year and net earnings, including acquisition and legal settlement charges, were $2.8 million compared with $4.9 million.
Without the charges, diluted earnings came to 19 cents a share or solidly above Wall Street's 16-cents estimate.
"This was a solid beat," said C.E. Unterberg Towbin analyst Kurt Lanzavecchia. He said Wall Street would probably raise its earnings targets for the company.
It is hard to argue Broadcom did not "execute phenomenally well," agreed Hambrecht & Quist analyst Jeffrey Lipton. "It was a stellar quarter."
Broadcom makes semiconductors used in cable and DSL modems, set-top boxes and networking gear, all fast growing markets.
The company also has an expanding client list. It's top three customers - Cisco Systems Inc. (CSCO), 3Com Corp. (COMS) and General Instrument Corp. (GIC) - made up 60% of sales this quarter compared with 70% in the first quarter, said William Ruehle, chief financial officer.
Broadcom also gets just 16% of its sales from abroad, meaning that there are significant opportunities overseas, Ruehle said.
In trading Wednesday, Broadcom shares sank 3/4, or 0.6%, to 131 1/4. Analysts said the earnings were strong enough to push the high-multiple stock higher. |
