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Broadcom’s Shares Fall As Expenses Rise In Q3
Irvine- based Broadcom Corp., which designs chips for networking equipment, cell phones, TV set top boxes, home networking gear has posted a significant second quarter outlook on Tuesday, while beating the analysts’ expectations. In the second quarter, the company quadrupled its profits which even beat its own quarterly sales outlook of $1.075 billion to $1.125 billion.
Amid a successful second quarter result, suddenly the chipmaker’s shares continued to fall, as the expenses rise in the third quarter. However, it was expected by the company that its profit margins for the current or third quarter will slip.
The company saw an improvement of $134 million or 25 percent per share in the second quarter, as compared to $34 million or 6 percent per share, during the same period last year. Broadcom’s sales were higher than expected. It had $1.2 billion in revenue, up 34 percent over the last year’s $897.9 million and up $100 million above analysts’ estimates.
Soon after the announcement of the second quarter outlook, Broadcom’s shares fell 5 percent at close of trading on a recent market value of about $13 billion. However, the company is expecting its third quarter sales would grow to a range of $1.25 billion to $1.3 billion. But, analysts had been expecting an average third- quarter revenue of $1.155 billion.
For the six months through June, Broadcom said, it saw $72 million added to its top line in licensing revenue from various deals.
Broadcom took charges of $12 million during the second quarter to settle the lawsuit with the Securities and Exchange Commission for its former executives’ defense. The executives were facing criminal charges over stock options tampering.
The company had also paid about $4 million related to its ongoing courtroom battles over chip patent infringement by San Diego rival Qualcomm Inc.
July 25th, 2008 at 12:28 pm
[...] Broadcom’s Shares Fall As Expenses Rise In Q3Irvine- based Broadcom Corp., which designs chips for networking equipment, cell phones, TV set top boxes, home networking gear has posted a significant second quarter outlook on Tuesday, while beating the analysts’ expectations. … [...]
August 3rd, 2008 at 12:19 pm
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