Broadcom (NASDAQ: AVGO) reported a solid quarterly beat, reaffirming the company’s strength in the semiconductor space. Although its questionable purchase of software company CA puts its debt levels to over $30 billion, investors may for now enjoy the company’s post-Q3 earnings beat.
Broadcom reported non-GAAP earnings of $4.98 a share. GAAP EPS came in at $2.71 as revenue rose 13.2 percent to $5.07 billion. The results sent AVGO stock up 7.7% on Fri. Sep 7. And the $1.75/share dividend declaration, which yields 3%, gives shareholders ample revenue and safety as the stock recovers from the downtrend.
The company forecast revenue of $5.4 billion compared to the $5.21 billion expectation from analysts. Non-GAAP gross margin will hover in the 67% range. On its conference call, the company forecast networking and compute offload will grow in the double digits Y/Y. Strong demand from the cloud and traditional enterprise are driving revenues. A cyclical headwind in video access, notably cable and satellite, will persist in the current fourth quarter. Here in this segment, Broadcom expects mid-single digit Y/Y growth.
Flat Revenue Growth in Wireless
Broadcom reported wireless revenue of $1.3 billion, unchanged from last year. This segment accounts for 25% of total revenue. Looking ahead, a ramp from its North America OEM customer will give revenue a 25% sequential increase in revenue (but down in the single digits Y/Y).
With selling pressure building in technology, AVGO stock is a rare bright spot.
