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To: Softechie who wrote (1133)	4/19/2001 12:39:21 AM
From: Softechie	Read Replies (1) \| Respond to of 2155

UPDATE 2-Broadcom Q1 earnings meet lowered analyst estimates -------------------------------------------------------------------------------- (adds detail from conference call, previous IRVINE) By Timna Tanners LOS ANGELES, April 18 (Reuters) - High-speed communications semiconductor maker Broadcom Corp. on Wednesday posted first-quarter earnings that met the company's lowered guidance, despite weaker orders from primary customers. Pro forma net income, which excludes merger-related expenses and payroll taxes on stock option exercises, was $24.2 million, or 9 cents a diluted share, down from $44.9 million, or 18 cents a share, in the year-ago quarter. The results met the Wall Street consensus analyst earnings forecast for the Irvine, Calif.-based company of 9 cents a share, according to research firm Thomson Financial/First Call. Earnings estimates from nine brokers ranged from 7 to 9 cents. Net revenues rose 62 percent year-over-year to $310.5 million from $191.6 million in the first quarter of 2000, but fell sequentially from the fourth quarter, when it posted revenues of $376.1 million. The company also said it would trim jobs in its current quarter to cut costs, but did not provide details on how many employees it would cut. The company joins a flock of other communications and networking chipmakers that have looked to cut costs as their share prices tumble. Broadcom lowered earnings expectations a month ago to reflect weakness in the quarter from its three major customers: Cisco Systems Inc. , Motorola Inc. and 3Com Corp. , which all have been hit by weaker economic conditions that have taken a toll on the entire tech sector. Shares of Broadcom have underperformed the tech-heavy Nasdaq, falling some 60 percent since the start of the year compared with the Nasdaq's 16 percent decline. In contrast, the Philadelphia semiconductor index <.SOXX> is up about 7 percent from levels at the start of the year. Broadcom shares closed up 15.7 percent on the Nasdaq, up $4.61 to $34.01. In after-hours Instinet trade the share price rose to ashigh as $36.20. A DIM OUTLOOK "Looking ahead, as a result of the continued weakness in the communications sector, we have not yet seen improvement in order visibility from customers," said Henry Nicholas, Broadcom president and chief executive officer. He noted in a conference call with analysts this was the first quarter the company was not posting an increase in profit or revenue, and noted that there was an inventory bubble in several of its key markets. Nicholas noted excessive inventories in the cable set-top and networking markets. Executives said they expected continuing soft orders from main customers, and general market weakness hurt its second quarter results. William Ruehle, Broadcom chief financial officer, said the company expected gross revenues to fall in the second quarter by up to 23 percent from first quarter levels. The company expects to report a pro forma loss of between 7 and 9 cents, he added. The range of estimates from 18 analysts for the quarter was between an 11-cent profit and a loss of three cents a share with the consensus estimate of a six-cent profit. CEO Nicholas said its headcount reduction would be material, but said the companies would continue to hire in areas it deems strategic. Broadcom also outlined the percentage of sales accounted for by its three top customers. Motorola Inc. comprised 19.8 percent of revenues, while 3Com Corp. accounted for 15.1 percent of revenues and Cisco Systems' percentage of sales slipped to less than 10 percent. Including charges, the net loss for the first quarter was $356.9 million, or $1.43 a share, compared with a profit of $38.6 million, or 15 cents a share, last year. REUTERS Rtr 23:15 04-18-01