Broadcom Q1 Profit Down 14%, But Results Beat View

(RTTNews) - Chip maker Broadcom Corp. (BRCM) on Thursday reported a 14 percent decline in profit for the first quarter from last year, reflecting lower revenues and higher expenses. However, both revenue and adjusted earnings for the quarter beat analysts' expectations. Looking ahead, the company forecast revenue for the second quarter in line with Street estimates.

Scott McGregor, Broadcom's President and Chief Executive Officer said, "Broadcom delivered overall results ahead of expectations in the March quarter. The upside was driven by strength in Broadband and Infrastructure, stronger-than-expected gross margins and continued operating expense discipline."

Irvine, California-based Broadcom's first-quarter net income was $165 million or $0.28 per share, down from $191 million or $0.33 per share in the year-ago period.

The latest quarter's results included a net gain on sale of certain assets of $52 million and purchased intangible impairment charges of $25 million, for a total positive impact to net income per share of $0.05.

Excluding one-time items, adjusted earnings for the quarter were $318 million or $0.51 per share, compared to $400 million or $0.65 per share in the prior-year quarter.

On average, thirty four analysts polled by Thomson Reuters expected the company to report earnings of $0.46 per share for the quarter. Analysts' estimates typically exclude special items.

Total net revenue for the quarter declined 1 percent to $1.98 billion from $2.01 billion in the same period last year, but beat analysts' consensus revenue estimate of $1.96 billion.

Looking ahead to the second quarter, Broadcom forecasts revenues in a range of $2.0 billion to $2.1 billion. Analysts currently anticipate revenues of $2.07 billion for the quarter.

McGregor said, "In the current quarter, we expect momentum in Infrastructure and Broadband to continue, driven by service provider spending on network build outs and technology upgrades."

BRCM closed Thursday's trading at $31.14, up $0.73 or 2.40 percent on a volume of 10.17 million shares. However, the stock declined $1.08 or 3.47 percent to $30.50 in after-hours trade.