Broadcom Expects Its Earnings to Bounce Back
December 12 2019 - 05:32PM
Dow Jones News
By Asa Fitch
Broadcom Inc. promised an earnings recovery in the current year
after the chip maker posted weaker fourth-quarter figures, dented
by the protracted U.S. export ban of some items to Chinese telecom
giant Huawei Technologies Co.
Broadcom said per-share earnings fell to $1.97 in the final
quarter of the financial year ended Nov. 3, compared with $2.64 a
year earlier. The more closely watched adjusted earnings, which
strip out some one-time items, fell 8% to $5.39 a share, in line
with expectations from analysts surveyed by FactSet.
The company gave an upbeat sales forecast for the financial year
that began last month, after reporting $5.78 billion in revenue for
its most recent quarter. Analysts had expected $5.77 billion. The
company projected growth of about 10% to roughly $25 billion,
compared with 8% sales growth in the year just ended.
Broadcom shares were higher in after-hours trading.
Chief Executive Hock Tan said he was optimistic about growth in
the company's core semiconductor business later in its current
fiscal year, and would benefit from its recent acquisition of
cybersecurity firm Symantec's enterprise business.
"We continue to believe that our core semiconductor business is
bottoming and will return to year over year growth in the second
half of our fiscal year," he said.
Broadcom has come off a tumultuous year, buffeted, in part, by
U.S. trade tensions with China. The company, in June, cut its sales
forecast by $2 billion. Chinese telecom-equipment maker Huawei
accounted for about $900 million of Broadcom's sales in its
previous fiscal year.
Mr. Tan struck a more upbeat tone in September, saying the chip
market had bottomed out. Even so, he warned customer uncertainty
was persisting and would weigh on the pace of demand recovery.
(END) Dow Jones Newswires
December 12, 2019 17:17 ET (22:17 GMT)
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