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Broadcom predicts it will earn more cash

by on07 September 2018

Higher demand for data centre tech 

Broadcom predicted current quarter revenue largely above estimates on higher demand for components that power data centres.

The outfit also thinks that the launch of Apple new iPhones is expected to bolster its wireless business.

Shares of Broadcom rose four percent to $224.90 in extended trading after the chipmaker also reported third-quarter profit that was better than what the cocaine nose jobs of Wall-Street predicted.

Revenue from enterprise storage business jumped 70 percent in the reported quarter as the acquisition of Brocade helped drive sales gains at the unit.

Its wireless business, which makes chips for Wi-Fi, Bluetooth, and GPS connectivity, reported flat revenue, while its wired infrastructure unit, which makes components used in telecommunication networks, posted a four percent rise from a year earlier.

Chief Executive Officer Hock Tan said: “More than half our consolidated revenue is benefiting from strong cloud and enterprise data centre spending. This, coupled with a seasonal uptick in wireless, will drive our forecast revenue in the fourth quarter.”

The company expects Apple to drive a 25 percent rise in wireless revenue from the previous quarter, although it may be down in single-digit percentage compared with a year earlier.

Tan, who has transformed Broadcom into a $100 billion company through a series of acquisitions, surprised Wall Street in July with his move to acquire software maker CA Technologies for $19 billion.

He said he planned to target the company’s enterprise customers with Broadcom’s offerings including server and storage connectivity products.

The CA deal comes after US President Donald Trump blocked Broadcom’s $117 billion offer to buy Qualcomm on national security grounds.

Broadcom forecast current-quarter revenue of about $5.40 billion, plus or minus $75 million. Analysts on average were expecting revenue of $5.35 billion.

Net income attributable to common stock rose to $1.2 billion, in the quarter ended 5 August from $481 million last year. Net revenue rose to $5.06 billion from $4.46 billion.


Last modified on 07 September 2018
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