Broadcom Jumps After Saying Quarter ‘Stronger Than Expected’
Broadcom Corp. (BRCM) rose the most in four months after the largest maker of chips that power television set-top boxes said fourth-quarter revenue will rise to the high end of its forecast, citing “solid” shipments.
Broadcom advanced 5 percent to $29.61 at 10 a.m. in New York, after gaining as much as 7 percent, the biggest intraday increase since Aug. 11. The stock had declined 35 percent this year through yesterday.
The quarter is “coming in stronger than expected,” Chief Executive Officer Scott McGregor said in a statement, issued ahead of the company’s analyst day in New York today. Broadcom may be benefiting from strong sales of Apple Inc. (AAPL)’s iPhone 4S, which it supplies with a blue-tooth chip, said Stacy Rasgon, an analyst at Sanford C. Bernstein & Co.
“I don’t think people were broadly expecting a raise,” said Rasgon, who rates the shares “market perform.”
Quarterly revenue will be $1.8 billion, the Irvine, California-based company said in the statement. Analysts predicted $1.76 billion, the average of estimates compiled by Bloomberg. Broadcom had earlier forecast sales of $1.7 billion to $1.8 billion for the three months ending Dec. 31.
Product gross margin, or the percentage of sales remaining after deducting manufacturing costs, will be about unchanged sequentially, Broadcom said. In October, the company predicted it would be “flat to slightly down.”
Broadcom said Oct. 25 results may be hurt by lackluster demand from phone-service providers for new equipment, the potential for fewer shipments of set-top boxes and personal computers due to a shortage of hard disks from flooding in Thailand, and the closing of a unit that made chips for digital TVs and Blu-ray players.
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