Broadcom CEO resigns; company posts big loss
Chipmaker Broadcom Corp. said late Thursday that Dr. Henry Nicholas III has resigned as the company's president and CEO "to attend to serious family matters."
News of his departure was matched by a fourth quarter net loss by the company of $1.75 billion, or $6.40 per share, after special charges. Most of the loss was attributable to goodwill impairment as was therefore non-cash related. In comparison, Broadcom reported a net loss of $183.3 million, or 68 cents per share, in the previous quarter, and a net loss of $329.6 million ($1.27 per share) in the year-ago period. The chipmaker also reported fourth quarter net revenue of $259.9 million, up 2.1 percent from $290 million in the previous financial period.
News of Nicholas' departure and the company's large financial loss in the fourth quarter sent Broadcom stock down $2.68 (15.22 percent) to about $14.93 per share in early trading Friday. Nicholas' resignation also comes in the wake of an executive reorganization (www.cedmagazine.com ) Broadcom announced Thursday morning.
Broadcom said Nicholas will serve out his current term as co-chairman of the company's board, but will not seek re-election this May during its annual shareholder meeting. Broadcom has tapped Alan "Lanny" Ross, the company's COO since November 2002, to assume Nicholas' president and CEO roles while the company searches for a permanent replacement. Dr. Henry Samueli will stay on as board co-chairman, CTO and vice president of research and development, Broadcom said.
Samueli and Nicholas co-founded Broadcom in 1991 and took the company public in 1998. Broadcom chips reside in devices such as cable modems, cable modem termination systems, digital set-top, DSL central offices and home networking gear. Its "QAMLink" chipset was a key component in Scientific-Atlanta digital set-tops that Time Warner Cable deployed in the mid-1990s to support its groundbreaking but expensive Full Service Network trial in Orlando, Fla.
While Broadcom endures through executive turmoil, rival chipmaker Conexant Systems Inc. recorded revenues of $164.5 million, up 4 percent from the previous quarter. Conexant's broadband communications unit, fueled by seasonally strong demand, recorded $144 million, up 8 percent sequentially and 14 percent year-over-year.