AVGO Stock: Broadcom Earnings Top Estimates, Revenue Outlook Above Views

Semiconductor maker Broadcom (AVGO) on Thursday reported earnings and revenue that topped Wall Street’s targets for its fiscal fourth quarter, despite slowing smartphone sales. Management’s revenue outlook for AVGO stock edged by analyst estimates.

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Broadcom earnings for the October-ending quarter came in at $10.45 a share on an adjusted basis, up 34% from a year earlier. Revenue rose 21% to $8.93 billion in the quarter.

Analysts polled by FactSet expected Broadcom earnings of $10.29 a share on sales of $8.9 billion. A year earlier, the San Jose, Calif.-based company earned $7.81 per share on sales of $7.41 billion.

For the current quarter ending on Jan. 30, Broadcom predicted sales of $8.9 billion. Analysts expected revenue of $8.78 billion in the fiscal first quarter.

AVGO Stock: Smartphone Shipments Fall In 2022

On the stock market today, AVGO stock rose 2% to near 542 in extended trading. Broadcom stock has retreated 21% thus far in 2022 amid the bear market.

Broadcom makes wireless chips for smartphones, such as Apple (AAPL) iPhones. Covid-related factory lockdowns in China have slowed iPhone production.

Market research firm IDC forecasts that shipments of smartphones will decline 9.1% in 2022 to 1.24 billion units. It expects 2.8% growth in 2023.

Broadcom also makes semiconductors for broadband communications, networking, storage and industrial applications.

Plus, Broadcom has a growing business in infrastructure software for mainframes, data centers and cybersecurity.

The company said quarterly chip sales rose 26% to $7.09 billion while infrastructure software sales increased 4% to $1.84 billion.

VMware Deal To Expand Software Business

In May, Broadcom announced a deal to buy VMware (VMW) for $61 billion in cash and stock. VMware provides cloud-computing management, infrastructure, networking, security and digital workspaces.

VMware reported October-quarter earnings and revenue below expectations. Broadcom’s fiscal 2023 outlook excludes VMware. The acquisition is expected to close in early 2023.

According to IBD Stock Checkup, AVGO stocks holds a Composite Rating of 87 out of a best-possible 99.

Follow Reinhardt Krause on Twitter @reinhardtk_tech for updates on 5G wireless, artificial intelligence, cybersecurity and cloud computing.

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