Avago Technologies Swings To Profit - Update

(RTTNews) - Analog semiconductor devices maker Avago Technologies Ltd. (AVGO), Wednesday reported a swing to profit in the third quarter from a loss last year, as revenues surged 37 percent reflecting strong growth across wireless communications and enterprise storage segments. Both adjusted earnings and revenues topped analysts' expectations.

The Singapore-based chip maker reported a third-quarter profit of $240 million or $0.84 per share compared to a loss of $164 million or $0.65 per share last year.

Excluding items, adjusted earnings for the quarter improved to $2.24 per share from $1.26 per share a year ago. On average, 22 analysts polled by Thomson Reuters estimated earnings of $2.14 per share for the quarter. Analysts' estimates typically exclude special items.

Revenues for the third quarter rose to $1.74 billion from $1.27 billion a year ago. Adjusted revenues improved to $1.75 billion from $1.29 billion last year. Analysts had a consensus revenue estimate of $1.74 billion for the quarter.

Gross margin for the quarter improved significantly to 51 percent from 31 percent last year.

"I am pleased with our third quarter revenue and earnings performance," said CEO Hock Tan. "Led by strong seasonal growth in our wireless segment, and stable performance from our enterprise storage, wired and industrial segments, we expect solid sequential revenue growth to sustain in the fourth quarter."

For the fourth quarter, the company expects adjusted revenues of $1.85 billion, plus or minus $25 million. Analysts currently expect revenues of $1.86 billion for the quarter.

The company in May had agreed to acquire Broadcom Corp. in a cash-and-stock deal valued at about $37 billion.

AVGO closed Wednesday's trading at $116.20, up $7.69 or 7.09%, on the Nasdaq. The stock further gained $2.25 or 1.94% in the after-hours trade.