Broadcom Inc. shares rose in the extended session Thursday after the chip and software company’s quarterly results and outlook surpassed Wall Street’s expectations and its chief executive said demand was “solid” going into the fourth quarter.
Broadcom
AVGO,
-1.42%
shares advanced 3% after hours, following a 1.4% decline in the regular session to close at $492.01.
The San Jose, Calif.-based company reported fiscal third-quarter net income of $3 billion, or $7.15 a share, compared with $1.8 billion, or $4.20 a share, in the year-ago period. Adjusted earnings, which exclude stock-based compensation and other items, were $9.73 a share, compared with $6.96 a share in the year-ago quarter.
Revenue rose to $8.46 billion from $6.78 billion in the year-ago quarter, as chip sales surged 32% to $6.62 billion from the year-ago period, and infrastructure software sales ticked 5% higher to $1.84 billion.
Analysts surveyed by FactSet had expected earnings of $9.56 a share on revenue of $8.41 billion, based on Broadcom’s forecast revenue of about $8.4 billion back in late May. The Street also forecast chip sales, on average, of $6.57 billion and infrastructure software sales of $1.83 billion.
“Broadcom’s record third-quarter results were driven by robust demand across cloud, service providers and enterprise,” said Hock Tan, Broadcom’s president and chief executive, in a statement. “We expect solid demand across our end markets to continue in the fourth quarter, reflecting continued investment by our customers of next-generation technologies in data centers, broadband and wireless.”
Broadcom forecast revenue of about $8.9 billion for the fiscal fourth quarter, while analysts have estimated revenue of $8.77 billion.
In July, the company said its software head, Tom Krause, is leaving the company in the middle of the $61 billion VMware Inc.
VMW,
-1.04%
acquisition he helped bring about, to go head the private company formed from a combined Citrix Systems Inc.
CTXS,
+0.18%
and Tibco Software. Broadcom’s earnings were overshadowed last quarter by the announcement of the VMware bid.
Year to date, shares of Broadcom have fallen 26%. In comparison, the S&P 500 index
SPX,
+0.30%
has fallen 17%, the tech-heavy Nasdaq Composite index
COMP,
-0.26%
is down 25%, and the PHLX Semiconductor Index
SOX,
-1.92%
has dropped more than 33%.
