Broadcom Lifts Q4 Revenue Outlook Above Estimates - Update

(RTTNews) - Chip maker Broadcom Corp. (BRCM) Tuesday lifted its revenue outlook for the fourth quarter of 2013, citing better-than-expected revenue in each reportable segment, particularly in Infrastructure & Networking. The company's current forecast comes above analysts' expectations.

Broadcom currently anticipates fourth-quarter net revenues to be about $2.0 billion to $2.05 billion, compared to its previous guidance of $1.975 billion plus or minus 3 percent.

On average, 39 analysts polled by Thomson Reuters expect the company to report revenues of $1.98 billion for the fourth-quarter. Analysts' estimates typically exclude special items.

The company now expects product gross margin for the fourth quarter to be down about 50 to 75 basis points from the third quarter, on both a GAAP and non-GAAP basis. In October, the company forecast gross margin for the quarter to drop 50 to 100 basis points sequentially.

For the third quarter ended September 30, product gross margin was 51.4 percent, and non-GAAP product gross margin was 53.6 percent.

The company now sees research & development and selling, general, and administrative expenses for the fourth-quarter to be up around $30 million to $50 million from the third quarter, on both a GAAP and non-GAAP basis, due to tighter expense management.

Earlier, the company expected the expenses to be up about $40 million to $60 million from third-quarter research & development and selling, general, and administrative expenses totaling $790 million on a GAAP basis, and $670 million on a non-GAAP basis.

In October end, Broadcom reported an increase in third-quarter profit, due mainly to higher gross margin and lower one-time expenses. Broadcom's earnings and revenue for the quarter came in well ahead of Wall Street expectations.

During the third quarter, Broadcom initiated a restructuring plan to cut costs and focus on strategic areas. The plan included job cuts of up to 1,150 employees, with some related to the acquisition of the Renesas Electronics business unit.

BRCM closed Monday's regular trading at $27.88 on the Nasdaq. In the pre-market activity on Tuesday, the shares are up 1.79 percent.