DOW JONES NEWSWIRES
Broadcom Corp.'s (BRCM) first-quarter earnings sank 61% as the chip maker continued a streak of lower income as higher expenses outpaced modestly improved revenue.
The company forecast second-quarter revenue of $1.9 billion to $2 billion, mostly trailing estimates of $1.97 billion from analysts surveyed by Thomson Reuters.
In January, the provider of chips for set-top boxes, networking equipment and smartphones projected mostly better-than-expected first-quarter revenue and said it was optimistic about its near-term growth.
The company has benefited from its exposure to iPhone maker Apple Inc. (AAPL) and competing smartphone maker Samsung Electronics Co. (005930.SE, SSNHY). But its overall results have been hurt in recent periods by weakness at Nokia Corp. (NOK) and other major handset customers.
Broadcom also has been expanding into networking, closing a $3.7 billion acquisition in February for NetLogic Microsystems Inc., a maker of network-focused processors, and last month buying BroadLight Inc., a privately held provider of fiber-access passive optical-network processors, for about $195 million.
Broadcom recorded a first-quarter profit of $88 million, or 15 cents a share, down from $228 million, or 40 cents a share, a year earlier. Excluding stock-based compensation, amortization and other items, earnings fell to 65 cents a share from 68 cents. Analysts were expecting 55 cents a share.
Total revenue grew 0.6% to $1.83 billion, beating Broadcom's January view of $1.7 billion to $1.8 billion.
Gross product margin narrowed to 48.1% from 49%. Total operating costs and expenses rose 12%.
Shares closed Tuesday at $36.71 and were down 10 cents after hours. Through the close, the stock has risen 25% since the start of the year.
-By Ben Fox Rubin, Dow Jones Newswires; 212-416-3108; email@example.com