Broadcom’s Q3 profit falls
IRVINE, Calif. (AP) – Broadcom Corp. said Thursday its third-quarter earnings were cut in half as revenue tumbled, and the chip maker warned that sales are trending flat sequentially for the current period leading into the holidays.
"It will be a little uncertain what's going to happen around Christmas with consumer demand," President and CEO Scott McGregor said on a conference call with analysts. "We're not economists, so, you know, we can't forecast this as well as maybe some of them can. But there's a little concern about whether Santa's coming this year or not."
The company earned $84.6 million, or 16 cents per share, compared with $164.9 million, or 31 cents, in the same quarter a year ago. Excluding one-time charges, Broadcom earned a total of 40 cents per share in the latest quarter, which did top the average estimate of 33 cents per share from analysts surveyed by Thomson Reuters.
Revenue slipped 3 percent to $1.25 billion from $1.3 billion, also beating out Wall Street's $1.16 billion forecast. Product sales, which make up the bulk of total revenue, fell nearly 5 percent, though licensing revenue jumped 34 percent.
Broadcom said revenue from broadband communications rose 9 percent quarter-over-quarter, driven by growth in the set-top box and modem product lines. In the digital TV market, however, results were hurt by one large customer losing market share in North America and some share loss with other customers. The company said these issues and the economy's impact on the digital TV market as a whole will drive measures to "appropriately size" that business.
Broadcom executives told analysts during a conference call they expect total revenue in the fourth quarter to be flat sequentially across its businesses. That would still top the $1.19 billion in revenue that analysts are expecting.
Broadcom said it isn't seeing specific weakness in a particular product segment but expressed concern on the call that the economy "is still not out of the woods yet."
The better-than-expected quarterly results and sales forecast wasn't enough to keep shares of Irvine, Calif.-based Broadcom from falling $2.68, or 8.7 percent, to $28 in after-hours trading. The stock closed earlier up 42 cents at $30.73.