By Erin McCarthy
Broadcom Corp. (BRCM) said its fourth-quarter profit fell 33% as
the chip maker's revenue declined, but still managed to surpass
market expectations.
Broadcom's shares edged up about 2.5% in after-hours trading as
the company also provided second-quarter guidance that matched
analysts' estimates.
The company projected revenue of about $1.9 billion to $2
billion for current quarter, in line with the $1.97 billion
estimate from analysts polled by Thomson Reuters.
Broadcom relies heavily on the handheld-device market, as it
makes chips for about half the world's tablets and smartphones. For
instance, it supplies chips for Apple Inc.'s iPads and iPhones, as
well as for Samsung Electronics Co.'s Galaxy phones.
While Broadcom has sought to expand its share of the
network-processor market, the company has also worked to further
tighten its hold on the mobile-communications space by trying to
keep up with the transition to next-generation technology.
In 2013, it agreed to buy the LTE, or Long Term Evolution,
assets from Renesas Electronics Corp. for $164 million. Last month,
the company said Samsung Electronics is officially a customer for
Broadcom's baseband chips for broadband wireless LTE
connections.
Overall, Broadcom reported a profit of $168 million, or 29 cents
a share, compared with a year-earlier profit of $251 million, or 43
cents a share. Excluding items, per-share earnings fell to 60 cents
from 76 cents. Analysts polled by Thomson Reuters were expecting
per-share earnings of 57 cents a share.
Revenue decreased 0.8% to $2.06 billion, but surpassed the
company's recent estimate of $2 billion to $2.05 billion.
Product gross margin widened to 50.3% from 49.7%. Through the
close, Broadcom's stock was up 6% in the past three months.
Write to Erin McCarthy at erin.mccarthy@wsj.com
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