AVGO Stock – Broadcom Reports Strong Fiscal Q3 Results with Revenue and EPS Beating Estimates

AVGO Stock – Broadcom’s fiscal third-quarter results exceeded Wall Street’s revenue and earnings expectations, reflecting the company’s robust performance and growing significance in the technology sector. The company’s stock has surged 75% over the past year as investors recognize the importance of Broadcom’s components in the infrastructure for artificial intelligence (AI).

Q3 Earnings and Revenue Performance

In the quarter ending August 4, Broadcom reported earnings per share (EPS) of $1.24, surpassing the expected $1.20. The company also achieved revenue of $13.07 billion, exceeding the anticipated $12.97 billion. Despite this strong performance, Broadcom’s stock fell by 7% in after-hours trading following guidance that was in line with market expectations.

Revenue and Earnings Guidance for Current Quarter

For the current quarter, Broadcom has projected revenue of $14 billion, with EPS anticipated to be $1.36 on expected revenue of $14.04 billion. This guidance aligns closely with analyst forecasts, indicating stability in the company’s financial outlook.

Net Loss and One-Time Tax Provision

Broadcom reported a net loss of $1.88 billion, or 40 cents per share, a stark contrast to the $6.12 billion net income or $1.24 per share reported in the same quarter last year. The net loss for the third quarter includes a one-time tax provision of $4.5 billion related to the transfer of intellectual property rights between company segments as part of supply chain management.

AI and Custom Chips Drive Future Growth

CEO Hock Tan highlighted that Broadcom expects to generate $12 billion in sales from AI parts and custom chips in fiscal 2024, up from a previous forecast of $11 billion. This forecast underscores the company’s growing role in the AI sector, driven by its work on crucial technologies such as Google’s TPU chip and Apple’s AI features.

Strong Performance in Semiconductors and Infrastructure Software

During the third quarter, Broadcom reported $7.27 billion in semiconductor sales, reflecting a 5% annual increase. This segment continues to outpace Broadcom’s infrastructure software division, which reported $5.8 billion in sales, largely attributed to the VMware acquisition.

Key Takeaways

• Earnings per Share (EPS): $1.24, exceeding the expected $1.20.
• Revenue: $13.07 billion, surpassing the anticipated $12.97 billion.
• Net Loss: $1.88 billion, compared to a net income of $6.12 billion in the same quarter last year.
• Current Quarter Guidance: Projected revenue of $14 billion and EPS of $1.36.
• AI Sales Forecast: Expected to reach $12 billion in fiscal 2024.
• Semiconductor Sales: $7.27 billion, up 5% year-over-year.
• Infrastructure Software Sales: $5.8 billion, driven by VMware acquisition.

This detailed analysis illustrates Broadcom’s strong market position and the pivotal role of its technologies in advancing AI infrastructure.

FAQ: Broadcom’s Fiscal Q3 Earnings Report