Chip maker Broadcom Corp. (BRCM: Quote), Tuesday reported a surge in first-quarter profit on improved gross margins and higher revenues, amid strong demand for chips used in smartphones and other devices. Both quarterly earnings and sales topped Wall Street estimates.
Broadcom also provided a strong revenue outlook for the second quarter, sending its shares up more than four percent in after-hours trade on the New York Stock Exchange.
"We see broad-based sequential growth driven by our industry-leading portfolio of wired and wireless communications platforms," said CEO Scott McGregor.
The Irvine, California-based company reported quarterly net income of $191 million or $0.33 per share, compared to $88 million or $0.15 per share last year.
Results for the quarter include stock-based compensation expense of $142 million and amortization charges of $59 million.
Excluding items, adjusted earnings for the quarter were $400 million or $0.65 per share, compared to $387 million or $0.65 per share in the prior year.
On average, 40 analysts polled by Thomson Reuters expected earnings of $0.56 per share for the quarter. Analysts' estimates typically exclude special items.
Broadcom has consistently been incurring hefty stock-based compensation expense and amortization charges.
The company's quarterly revenues rose 9.7 percent to $2.01 billion from $1.83 billion a year ago. Forty-two analysts on consensus estimated revenues of $1.91 billion.
Gross margin for the quarter expanded to 49.4 percent from 48.1 percent a year ago.
Broadcom's products help mobile devices connect to the Internet. Its chips are widely used in smartphones, computers and network equipments, and its main customers include Apple Inc. (AAPL) and Samsung.
For the second quarter, Broadcom expects revenue of $2.10 billion, plus or minus 4 percent. Analysts currently expect revenues of $2.05 billion for the quarter.
Earlier today, Apple said it sold 37.4 million iPhones in the quarter, topping analysts estimate of 35.4 million. It also sold 19.5 million iPads. Shipments of devices by Apple and Samsung weigh on the growth of companies like Broadcom.
Broadcom stock closed Tuesday regular trade at $32.98, up 1.17%, on a volume of 8.6 million shares on the Nasdaq. In after hours, the stock gained $1.42 or 4.31%. In the past year, the stock has traded in a range of $28.60 - $37.25.
by RTT Staff Writer
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