By Maria Armental

 

Chip maker Broadcom Inc. reported better-than-expected results for the third quarter driven by infrastructure software revenue gains amid the coronavirus pandemic. Here's what you need to know.

 

PROFIT: Net income fell to $688 million, before dividends on preferred stock, from $715 million a year earlier. On a per-share basis, profit fell to $1.45 a share. Adjusted profit rose to $5.40 a share. Analysts surveyed by FactSet expected $1.09 a share, or $5.24 a share as adjusted.

 

REVENUE: Revenue rose to $5.82 billion from $5.52 billion a year earlier, driven by a 41% increase in infrastructure software revenue that offset a 4% decline from its core semiconductor solutions business. Analysts expected about $5.77 billion.

 

OUTLOOK: This quarter, Broadcom expects about $6.4 billion in revenue, compared with analysts' projected $6.2 billion.

 

FCF: Broadcom generated $3.07 billion in free cash flow, a 33% increase from the year ago. "Looking ahead, our cash flow outlook remains robust and we plan to pay down an additional $3 billion in debt in the fourth quarter," Chief Financial Officer Tom Krause said in a statement.

 

PANDEMIC: Company officials had pointed to higher demand from cloud, telecom and enterprise customers offset by supply-chain constraints and a substantial reset in wireless. On Thursday, Chief Executive Hock Tan said in a statement that the company's forecast for the fourth quarter "reflects a strong anticipated ramp in wireless, as well as the continuing surge in demand for networking from cloud and telecom customers, more than offsetting expected softness in enterprise."

 

Write to Maria Armental at maria.armental@wsj.com

 

(END) Dow Jones Newswires

September 03, 2020 16:46 ET (20:46 GMT)

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