Broadcom Gives a Rosy Outlook, Doubles Quarterly Dividend
December 08 2016 - 5:30PM
Dow Jones News
Broadcom Ltd. said it swung to a loss in the latest quarter,
though the chip maker gave a positive outlook for the current
quarter and its board doubled its dividend.
Shares, up 18% this year, rose 3.1% to $176 in recent
after-hours trading.
For the current quarter, the company forecast revenue of $4.075
billion, plus or minus $75 million. Analysts polled by Thomson
Reuters expected adjusted revenue of $3.96 billion.
Chip maker Avago Technologies Ltd. completed its roughly $37
billion acquisition of rival Broadcom Corp. in February, with the
combined company retaining the Broadcom name and AVGO ticker
symbol. The deal, one of the largest mergers in the chip sector,
brought together complementary product lines, including chips that
handle different tasks in smartphones from Apple Inc. and Samsung
Electronics Co.
Last month, Broadcom agreed to a $5.5 billion deal for Brocade
Communications Systems Inc., a planned acquisition that stands to
help Broadcom further reduce its reliance on sales of wireless
chips for smartphones, a market that has slowed lately.
For the period ended Oct. 30, Broadcom reported a loss of $632
million, or $1.59 a share, compared with a year-earlier profit of
$429 million, or $1.49 a share. Excluding items, adjusted per-share
earnings rose to $3.47 from $2.51. Analysts expected per-share
profit of $3.38.
Revenue more than doubled to $4.136 billion. Net revenue
including certain acquisition-related adjustments reached $4.146
billion, in line with expectations for $4.1 billion to $4.175
billion.
Gross margin fell to 52.5% from 54.2%.
After the increase, the company's quarterly dividend will stand
at $1.02 a share.
Write to Tess Stynes at tess.stynes@wsj.com
(END) Dow Jones Newswires
December 08, 2016 17:15 ET (22:15 GMT)
Copyright (c) 2016 Dow Jones & Company, Inc.
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