Shares of Broadcom Inc. (NASDAQ: AVGO) rose 4% to USD 224.90 in extended trading on Thursday after the chipmaker posted third-quarter earnings that topped estimates and forecast current-quarter revenue above expectations.
Net income attributable to common stock rose to USD 1.2 Billion, or USD 2.71 per share, in the quarter ended Aug. 5 from USD 481 Million, or USD 1.14 per share, a year earlier. Excluding items, the company earned USD 4.98 per share. Net revenue rose to USD 5.06 Billion from USD 4.46 Billion. Analysts on average were expecting earnings of USD 4.83 per share on revenue of USD 5.07 billion.
Revenue from enterprise storage business jumped 70% in the reported quarter as the acquisition of Brocade helped drive sales gains at the unit. Its wireless business, which makes chips for Wi-Fi, Bluetooth, and GPS connectivity, reported flat revenue, while its wired infrastructure unit, which makes components used in telecommunication networks, posted a 4% rise from a year earlier.
“More than half our consolidated revenue … is benefiting from strong cloud and enterprise data center spending,” Chief Executive Officer Hock Tan said on a post-earnings call with analysts. “This, coupled with a seasonal uptick in wireless, will drive our forecast revenue in the fourth quarter.”
The Company expects a ramp at its North American customer — which analysts identified as Apple (NASDAQ: AAPL) — to drive a 25% rise in wireless revenue from the previous quarter, although it may be down in single-digit percentage compared with a year earlier. Apple is set to unveil its new iPhones next week.
Broadcom forecast current-quarter revenue of about USD 5.40 Billion, plus or minus USD 75 Million. Analysts on average were expecting revenue of USD 5.35 billion, according to Thomson Reuters I/B/E/S.