Broadcom tops revenue forecast, faces SEC charges for stock option backdating
Semiconductor chip-maker Broadcom topped its first-quarter revenue goal yesterday with a 14.5 percent revenue increase – to $1.03 billion.
Broadcom – which makes chips for cable modems, mobile phones, network equipment and consumer devices – had forecast first-quarter revenues between $975 million and $1.005 billion, while analysts estimated $992.6 million.
“Broadcom's first-quarter results came in much stronger than we expected, driven primarily by greater demand within our traditional wireline businesses – Enterprise Networking and Broadband Communications,” said Scott A. McGregor, Broadcom's president and CEO. “This increased demand enabled Broadcom to achieve a record revenue level and strong cash flow from operations and to fund an aggressive share repurchase program. While we remain cautious on the macroeconomic front, based on strong ordering trends from our customers throughout the first quarter, we expect solid revenue growth for the second quarter within each of our three major target markets.”
Net revenue for the first quarter of 2008 was $1.032 billion, an increase of 0.5 percent compared with the $1.027 million reported for the fourth quarter of 2007. Broadcom said net revenue for the first quarter of 2008 and fourth quarter of 2007 included royalties of $35.6 million and $31.8 million, respectively, received pursuant to a patent license agreement entered into in July 2007.
Also yesterday, Irvine, Calif.-based Broadcom agreed to pay $12 million to settle charges without admitting to or denying allegations by the Securities and Exchange Commission (SEC) that the company fraudulently backdated stock options for five years.
As a result of the illegal stock option backdating, Broadcom restated its financial results in January 2007 and reported more than $2 billion in additional compensation expenses.
“We are pleased that the SEC's investigation of our historical stock option grant and accounting practices has concluded as to the company,” said Broadcom in a statement to CED. “This is a major step in the process of closing this chapter as we remain focused on the company's business today and for the future.”
Broadcom announced yesterday that it had expanded its network switching portfolio with an end-to-end solution for businesses deploying 802.11n Wi-Fi networks.
The new product combines Broadcom's silicon with its Fastpath networking software. With the new offering, Broadcom said enterprise Wi-Fi access points can deliver superior performance and scalability across a customer's entire network.
More Broadband Direct: