Broadcom Slips To Loss, But Tops Estimates; Weak Outlook Drag On Shares

(RTTNews) - Chip maker Broadcom Corp. (BRCM), Tuesday reported a slip to loss in the second quarter, hurt by impairment charges from its acquisition of NetLogic Microsystems, as well as stock-based compensation expenses. However, earnings topped Wall Street expectations. Revenues climbed six percent on demand for its chips used in smartphones and other devices, but fell shy of estimates.

The company, whose major customers include Apple Inc. (APPL) and Samsung, detailed a weak revenue outlook for the third quarter.

Following the results, Broadcom shares slid 5 percent in after-hours trade, having dropped 4 percent at the regular close.

Broadcom, based in Irvine, California, posted a quarterly net loss of $251 million or $0.43 per share, compared with net income of $160 million or $0.28 per share last year.

Results for the quarter include impairment charges of $501 million, or $0.87 per share, related to its $3.7 billion acquisition of NetLogic Microsystems in February 2012.

Excluding items, adjusted earnings for the quarter were $436 million or $0.70 per share, compared with $435 million or $0.72 per share a year ago. Analysts polled by Thomson Reuters expected earnings of $0.68 per share.

The company's revenues for the quarter grew 6 percent to $2.09 billion from $1.97 billion in the prior year, but missed analysts' expectations of $2.10 billion.

For the third quarter, Broadcom expects revenues of $2.05 billion to $2.20 billion, while analysts expect $2.25 billion.

With its chips widely used in smartphones, computers and network equipments, Broadcom has to grapple with soft economic conditions and a possible saturation in the smartphone market that may impinge on its future sales.

Meanwhile, Apple has somewhat shrugged off such anxieties. The company today said it sold 31.2 million iPhones in its recent quarter, up 20 percent from last year. However, iPad sales slid 14 percent to 14.6 million units.

Broadcom's stock closed Tuesday regular trade at $31.83, down 4.27%, on a volume of 30 million shares on the Nasdaq. In after-hours, the stock further dropped $1.78 or 5.66% at $30.03. In the past year, the stock has trended in a range of $29.95 - $37.85.