By Tess Stynes 

Broadcom Corp. said fourth-quarter earnings surged thanks to continued growth in the chip maker's broadband and connectivity business, as well as lower costs.

Shares rose 2.3% to $42.24 in recent after-hours trading.

Chip maker Broadcom is well known in the handheld-device market, as it makes chips for about half the world's tablets and smartphones, but the company has also sought to expand its share of the network-processor market.

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.

Overall, Broadcom reported a profit of $390 million, or 64 cents a share, up from $168 million, or 29 cents a share, a year earlier. Excluding stock-based compensation, restructuring-related expenses and other items, earnings were 90 cents. Analysts expected 87 cents.

Revenue increased 3.8% to $2.14 billion, near the high end of the company's expectations for $2.08 billion to $2.15 billion.

For the current quarter, Broadcom forecast revenue of $1.925 billion to $2.075 billion. Analysts polled by Thomson Reuters expected $2.01 billion.

Write to Tess Stynes at tess.stynes@wsj.com

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