By Maria Armental
Broadcom Corp. (BRCM) swung to a profit in the second quarter,
driven by higher demand for chips in smartphones, broadband and
networking markets.
For the current quarter, the Silicon Valley chip maker projected
revenue of $2.06 billion to 2.21 billion, compared with the
consensus estimate of $2.24 billion from analysts surveyed by
Thomson Reuters.
Fellow chip maker Avago Technologies Ltd. (AVGO), the former
semiconductor unit of Hewlett-Packard Co., has offered to buy
Broadcom in a cash-and-stock deal valued at $37 billion. The
merger, subject to shareholders' approval, is expected to close in
the first quarter. If approved, it would be the largest technology
acquisition on record.
The largest maker of chips used in networking boxes, Broadcom
last year closed its cellular-chip business, targeting about $700
million in savings a year.
Asked recently by the Securities and Exchange Commission about
potential business contacts with Syria, Sudan and Cuba, three
countries designated by the State Department as sponsors of
terrorism, Broadcom has said it had no knowledge of present or past
contacts directly or indirectly through its clients and that it has
established policies to ensure compliance.
Overall, Broadcom on Thursday reported a quarterly profit of
$386 million, or 63 cents a share, compared with a year-earlier
loss of about $1 million, or less than a penny a share. Excluding
restructuring-related costs and other items, earnings rose to 72
cents a share from 49 cents a year earlier.
Analysts surveyed by Thomson Reuters had estimated a profit of
75 cents a share.
Net revenue rose 2.7% to $2.1 billion, in line with the
company's projection.
The company said that given its pending acquisition by Avago, it
will no longer hold conference calls with analysts to discuss
quarterly results.
Broadcom shares, up nearly 19% this year, edged up 0.23% to
$51.47 in late trading.
Write to Maria Armental at maria.armental@wsj.com
Subscribe to WSJ: http://online.wsj.com?mod=djnwires