Broadcom revenue grows 9% despite weak semiconductor business

Broadcom said networking performed well driven by demand for merchant switching and routing platforms. Broadcom said it also expected shipments …

Broadcom said its revenue rose 9 percent to $5.52 billion in the third quarter ended Aug. 4 from $5.06 billion in the same period last year.

Broadcom generated revenue of $4.353 billion (–5 percent) from semiconductor solutions and $1.140 billion from infrastructure software business.

Broadcom said demand for microchips had hit a bottom and would remain at current levels, a sign that an industry downturn may linger.

Research firm Gartner forecasts 9.6 percent dip in semiconductor revenue to $429 billion in 2019. U.S.-China trade tensions, including tariffs on some products and the restrictions on sales to Huawei are pressuring chipmakers.

“There is not much clarity or visibility yet, or certainty that any sharp recovery is around the corner,” Broadcom CEO Hock Tan said.

Broadcom said networking performed well driven by demand for merchant switching and routing platforms. Broadcom said it also expected shipments of custom silicon solutions in AI, SmartNIC and video transcoding to cloud datacenters were strong.

The chipmaker also maintained its full-year 2019 revenue forecast of $22.50 billion, saying that although the U.S.-China trade conflict continues, it had not seen further deterioration in its business, both globally and in China.

Broadcom aims to achieve revenue of $17.5 billion from semiconductor solutions and $5 billion from infrastructure software.

Broadcom recently announced a $10.7 billion deal to buy Symantec’s enterprise security unit. Tan has propelled the chipmaker that was worth just a few billions to a market capitalization of about $118 billion in the period that he has been at the helm.

Broadcom earlier acquired software maker CA Technologies for $19 billion to diversify its revenue stream.

Broadcom could not buy rival Qualcomm as the United States federal government blocked the deal due to security concerns.

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Broadcom Dips After Chipmaker Cautions on ‘Bottomed Out’ Semiconductor Demand

Broadcom Inc. (AVGO – Get Report) shares were indicated lower in pre-market trading Friday after the chipmaker posted stronger-than-expected third …

Broadcom Inc. (AVGOGet Report) shares traded lower Friday after the chipmaker posted stronger-than-expected third quarter earnings but cautioned that a recovery in global semiconductor markets could take longer than forecast.

Broadcom said non-GAAP operating earnings for the three months ending on August 4, the company’s fiscal third quarter, came in at $5.16 per share, down 1% from the same period last year but 3 cents ahead of the Street consensus forecast. Group revenues, Broadcom said, rose 9% to $5.515 billion but fell shy of analysts’ estimates of a $5.54 billion tally.

Looking into its full financial year, Broadcom — which does not provide quarterly guidance — said it still expects revenues to come in around $22.5 billion, with around $500 million in capital expenditures, and non-GAAP earnings of $21.13 per share. However, Broadcom warned that semiconductor solutions demand had “bottomed out but will continue to remain at these levels due to the current uncertain environment.”

“The US-China trade dispute is turning into an extended affair with lots of twists and turns in uncertainty,” Broadcom CEO Hock Tan told investors on a conference call late Thursday. “And we are assuming conditions (are) not going to change from what we’re seeing now. And if we make that assumption next year, you probably see a very uncertain 2020.”

“But as we sit here right now it appears we have hit bottom at least in the semiconductor — as it relates to the semiconductor solution side, we have hit bottom … and we’re kind of staying at the bottom.”

Broadcom shares were marked 2.3% lower at the start of trading Friday to change hands at $292.86 each, a move that would trim the stock’s three-month gain to around 4.5%.

Tan said the company’s planned acquisition of the enterprise software business of Symantec Corp. (SYMCGet Report) , which is expected to close in the first quarter of next year, remains “the logical next step in Broadcom’s infrastructure software strategy, and adds a $160 billion cyber security market to our — to the Broadcom’s (total addressable market).

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Broadcom says chip demand has hit bottom, but uncertain on recovery timing

After its move to buy peer Qualcomm Inc in what would have been the biggest-ever technology deal was blocked, Broadcom acquired software maker …

(Reuters) – Broadcom Inc said on Thursday demand for microchips had hit a bottom and would remain at current levels, a sign that an industry downturn may linger, and added that there was no clear indication as to when the recovery would take place.

FILE PHOTO: A sign to the campus offices of chipmaker Broadcom Ltd is shown in Irvine, California, U.S., November 6, 2017. REUTERS/Mike Blake/File Photo

The chip industry has been in a slowdown with research firm Gartner forecasting a 9.6% drop in global semiconductor revenue to $429 billion in 2019. U.S.-China trade tensions, including tariffs on some products and the restrictions on sales to Huawei, have been pressuring chipmakers.

“…There is not much clarity or visibility yet, or certainty that any sharp recovery is around the corner,” Chief Executive Officer Hock Tan said on a post-earnings call.

He said the company is managing its chip business with an expectation that it will continue to operate in a “very low growth, uncertain macro environment” for the foreseeable future.

Shares of Broadcom fell 1.5% in extended trading.

Revenue from the company’s semiconductor solutions segment fell about 5% to $4.35 billion from a year ago.

Total net revenue rose to $5.52 billion in the third quarter ended Aug. 4 from $5.06 billion, but missed analysts average estimate of $5.54 billion, according to IBES data from Refinitiv.

The chipmaker also maintained its full-year 2019 revenue forecast of $22.50 billion, saying that although the U.S.-China trade conflict continues, it had not seen further deterioration in its business, both globally and in China.

“Our industry checks point to a modest demand recovery in the second half of 2019 but we think it is appropriate for Broadcom to provide a cautious outlook at this juncture due to the uncertainty caused by the trade friction,” Summit Insights Group analyst Kinngai Chan said.

Through a string of big-money acquisitions, the latest being a $10.7 billion proposed deal to buy Symantec Corp’s enterprise security unit, Tan has propelled the chipmaker that was worth just a few billions to a market capitalization of about $118 billion in the period that he has been at the helm.

After its move to buy peer Qualcomm Inc in what would have been the biggest-ever technology deal was blocked, Broadcom acquired software maker CA Technologies for $19 billion to diversify its revenue stream.

Net income attributable to common stock fell to $715 million, or $1.71 per share, in the quarter, from $1.2 billion, or $2.71 per share, a year earlier.

Excluding items, Broadcom earned a profit of $5.16 per share, beating estimates of a profit of $5.13 per share.

Reporting by Arjun Panchadar in Bengaluru; Editing by Shailesh Kuber

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Broadcom Inc (NASDAQ:AVGO) Shares Bought by Breakline Capital LLC

Breakline Capital LLC grew its position in Broadcom Inc (NASDAQ:AVGO) by 7.3% in the 2nd quarter, according to the company in its most recent 13F …

Broadcom logoBreakline Capital LLC grew its position in Broadcom Inc (NASDAQ:AVGO) by 7.3% in the 2nd quarter, according to the company in its most recent 13F filing with the Securities and Exchange Commission (SEC). The firm owned 18,046 shares of the semiconductor manufacturer’s stock after buying an additional 1,231 shares during the period. Broadcom accounts for approximately 2.9% of Breakline Capital LLC’s investment portfolio, making the stock its 17th largest position. Breakline Capital LLC’s holdings in Broadcom were worth $5,195,000 at the end of the most recent quarter.

Several other institutional investors have also recently bought and sold shares of AVGO. CRA Financial Services LLC grew its stake in shares of Broadcom by 2.0% in the second quarter. CRA Financial Services LLC now owns 1,696 shares of the semiconductor manufacturer’s stock valued at $488,000 after buying an additional 33 shares in the last quarter. Liberty Wealth Management LLC lifted its position in shares of Broadcom by 62.5% during the second quarter. Liberty Wealth Management LLC now owns 91 shares of the semiconductor manufacturer’s stock worth $26,000 after purchasing an additional 35 shares in the last quarter. Tarbox Family Office Inc. lifted its position in shares of Broadcom by 20.2% during the second quarter. Tarbox Family Office Inc. now owns 214 shares of the semiconductor manufacturer’s stock worth $62,000 after purchasing an additional 36 shares in the last quarter. Enterprise Financial Services Corp boosted its stake in shares of Broadcom by 14.7% in the second quarter. Enterprise Financial Services Corp now owns 289 shares of the semiconductor manufacturer’s stock valued at $83,000 after purchasing an additional 37 shares during the period. Finally, First Business Financial Services Inc. boosted its stake in shares of Broadcom by 1.7% in the second quarter. First Business Financial Services Inc. now owns 2,336 shares of the semiconductor manufacturer’s stock valued at $672,000 after purchasing an additional 39 shares during the period. 84.63% of the stock is owned by institutional investors and hedge funds.

Shares of AVGO stock opened at $294.44 on Wednesday. The stock’s 50-day moving average is $283.18 and its two-hundred day moving average is $286.65. The company has a debt-to-equity ratio of 1.53, a quick ratio of 1.13 and a current ratio of 1.26. Broadcom Inc has a 1 year low of $208.23 and a 1 year high of $323.20. The firm has a market cap of $116.48 billion, a price-to-earnings ratio of 15.64, a PEG ratio of 1.43 and a beta of 0.88.

Broadcom (NASDAQ:AVGO) last posted its earnings results on Thursday, June 13th. The semiconductor manufacturer reported $5.21 earnings per share for the quarter, beating the Thomson Reuters’ consensus estimate of $5.18 by $0.03. The business had revenue of $5.52 billion during the quarter, compared to the consensus estimate of $5.70 billion. Broadcom had a return on equity of 32.81% and a net margin of 15.92%. The business’s quarterly revenue was up 10.0% on a year-over-year basis. During the same period in the previous year, the business earned $4.88 EPS. As a group, research analysts predict that Broadcom Inc will post 17.23 EPS for the current year.

In other news, insider Hock E. Tan sold 20,000 shares of the company’s stock in a transaction dated Monday, July 15th. The shares were sold at an average price of $292.16, for a total value of $5,843,200.00. The sale was disclosed in a legal filing with the Securities & Exchange Commission, which is available through this hyperlink. Also, SVP Bryan Ingram sold 11,922 shares of the company’s stock in a transaction dated Wednesday, June 26th. The shares were sold at an average price of $278.58, for a total transaction of $3,321,230.76. The disclosure for this sale can be found here. In the last quarter, insiders sold 85,388 shares of company stock valued at $23,607,682. 3.30% of the stock is owned by company insiders.

AVGO has been the topic of several recent research reports. KeyCorp upped their target price on shares of Broadcom from $310.00 to $330.00 and gave the stock an “overweight” rating in a research note on Friday, August 9th. Citigroup dropped their price target on shares of Broadcom from $320.00 to $300.00 and set a “buy” rating for the company in a research note on Friday, June 14th. Daiwa Capital Markets downgraded shares of Broadcom from a “buy” rating to a “neutral” rating in a research note on Thursday, August 15th. Craig Hallum reaffirmed a “buy” rating and set a $315.00 price objective (down previously from $325.00) on shares of Broadcom in a research report on Friday, June 14th. Finally, Cowen reiterated a “market perform” rating and issued a $265.00 price objective (down from $280.00) on shares of Broadcom in a research note on Friday, June 14th. Ten research analysts have rated the stock with a hold rating and twenty-six have assigned a buy rating to the company’s stock. The company currently has a consensus rating of “Buy” and an average price target of $303.97.

Broadcom Company Profile

Broadcom Inc designs, develops, and supplies a range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates through four segments: Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other.

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Want to see what other hedge funds are holding AVGO?Visit HoldingsChannel.com to get the latest 13F filings and insider trades for Broadcom Inc (NASDAQ:AVGO).

Institutional Ownership by Quarter for Broadcom (NASDAQ:AVGO)

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AlphaOne Investment Services LLC Buys Shares of 4660 Broadcom Inc (NASDAQ:AVGO)

AlphaOne Investment Services LLC bought a new position in Broadcom Inc (NASDAQ:AVGO) during the 2nd quarter, according to its most recent …

Broadcom logoAlphaOne Investment Services LLC bought a new position in Broadcom Inc (NASDAQ:AVGO) during the 2nd quarter, according to its most recent disclosure with the Securities and Exchange Commission. The institutional investor bought 4,660 shares of the semiconductor manufacturer’s stock, valued at approximately $1,341,000. Broadcom comprises about 1.0% of AlphaOne Investment Services LLC’s investment portfolio, making the stock its 21st largest holding.

Other institutional investors and hedge funds have also recently bought and sold shares of the company. Pinnacle Bank lifted its stake in Broadcom by 128.2% in the second quarter. Pinnacle Bank now owns 89 shares of the semiconductor manufacturer’s stock valued at $26,000 after acquiring an additional 50 shares during the last quarter. Liberty Wealth Management LLC boosted its holdings in Broadcom by 62.5% in the second quarter. Liberty Wealth Management LLC now owns 91 shares of the semiconductor manufacturer’s stock worth $26,000 after purchasing an additional 35 shares in the last quarter. Advisors Preferred LLC bought a new stake in Broadcom in the second quarter worth $27,000. FNY Investment Advisers LLC bought a new stake in Broadcom in the second quarter worth $51,000. Finally, Citizens Financial Group Inc RI increased its position in Broadcom by 257.1% during the first quarter. Citizens Financial Group Inc RI now owns 175 shares of the semiconductor manufacturer’s stock worth $52,000 after buying an additional 126 shares during the last quarter. 84.63% of the stock is owned by institutional investors.

A number of analysts have weighed in on the company. Zacks Investment Research raised Broadcom from a “sell” rating to a “hold” rating and set a $279.00 price target for the company in a research report on Tuesday, June 18th. Cowen reiterated a “market perform” rating and set a $265.00 price target (down previously from $280.00) on shares of Broadcom in a research note on Friday, June 14th. JPMorgan Chase & Co. cut their price objective on Broadcom from $365.00 to $350.00 and set an “overweight” rating on the stock in a research note on Friday, June 14th. Citigroup cut their price objective on Broadcom from $320.00 to $300.00 and set a “buy” rating on the stock in a research note on Friday, June 14th. Finally, Daiwa Capital Markets lowered Broadcom from a “buy” rating to a “neutral” rating in a report on Thursday, August 15th. Ten research analysts have rated the stock with a hold rating and twenty-six have assigned a buy rating to the company’s stock. Broadcom has a consensus rating of “Buy” and a consensus target price of $303.97.

AVGO opened at $294.44 on Wednesday. The business has a 50 day moving average of $283.18 and a 200-day moving average of $286.65. The stock has a market capitalization of $116.20 billion, a price-to-earnings ratio of 15.64, a P/E/G ratio of 1.43 and a beta of 0.88. The company has a current ratio of 1.26, a quick ratio of 1.13 and a debt-to-equity ratio of 1.53. Broadcom Inc has a 1-year low of $208.23 and a 1-year high of $323.20.

Broadcom (NASDAQ:AVGO) last announced its earnings results on Thursday, June 13th. The semiconductor manufacturer reported $5.21 earnings per share (EPS) for the quarter, topping the Zacks’ consensus estimate of $5.18 by $0.03. Broadcom had a net margin of 15.92% and a return on equity of 32.81%. The business had revenue of $5.52 billion for the quarter, compared to analyst estimates of $5.70 billion. During the same quarter in the previous year, the firm posted $4.88 earnings per share. Broadcom’s revenue was up 10.0% compared to the same quarter last year. Equities analysts predict that Broadcom Inc will post 17.23 EPS for the current year.

In other Broadcom news, SVP Bryan Ingram sold 13,466 shares of the company’s stock in a transaction that occurred on Wednesday, June 19th. The stock was sold at an average price of $278.78, for a total value of $3,754,051.48. The transaction was disclosed in a legal filing with the Securities & Exchange Commission, which is available at the SEC website. Also, insider Hock E. Tan sold 20,000 shares of the firm’s stock in a transaction that occurred on Monday, July 15th. The stock was sold at an average price of $292.16, for a total value of $5,843,200.00. The disclosure for this sale can be found here. In the last 90 days, insiders have sold 85,388 shares of company stock worth $23,607,682. Insiders own 3.30% of the company’s stock.

About Broadcom

Broadcom Inc designs, develops, and supplies a range of semiconductor devices with a focus on complex digital and mixed signal complementary metal oxide semiconductor based devices and analog III-V based products worldwide. The company operates through four segments: Wired Infrastructure, Wireless Communications, Enterprise Storage, and Industrial & Other.

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Institutional Ownership by Quarter for Broadcom (NASDAQ:AVGO)

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