By Tess Stynes
Broadcom Corp. said its first-quarter earnings rose 27% as the
chip maker reported stronger revenue and some decline in operating
expenses.
Shares rose 3% to $45.30 in recent after hours trading as the
results topped expectations.
For the current quarter, the company forecast revenue of $2.025
billion to $2.175 billion. The midpoint of the guidance topped
estimates of analysts polled by Thomson Reuters for $2.07
billion.
Broadcom Corp. and so-called merchant-chip suppliers have been
churning out new chips to help devices like switching systems move
data between computers and the Internet. Products from such chip
suppliers are increasingly popular among network-hardware companies
that don't want to design semiconductors themselves.
Broadcom, the biggest maker of chips used in networking boxes,
recently announced high-performance additions to a chip line that
it expects to be widely used in both switching systems and routers
that help direct Internet traffic.
Chief Executive Scott McGregor said the latest results were
driven by strength in the high-end smartphone and broadband access
markets.
Overall, Broadcom reported a profit of $209 million, or 34 cents
a share, up from $165 million, or 28 cents a share, a year earlier.
Excluding items such as asset write-downs and year-earlier asset
sale gains, per-share earnings rose to 64 cents from 33 cents.
Analysts expected per-share earnings of 60 cents.
Revenue increased 3.7% to $2.06 billion from the prior quarter.
Analysts expected $2.01 billion.
Research and development expenses fell 15% and overhead costs
declined 4.3%.
Broadcom last year decided to exit it cellular baseband
unit--which designs chips used in connecting smartphones, tablets
and other mobile electronics to wireless networks. Broadcom was
aiming to save about $700 million a year with the move.
Write to Tess Stynes at tess.stynes@wsj.com
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