Broadcom Forecast Misses Some Estimates as Carriers Trim OrdersIan King
Broadcom Corp., a maker of chips that help mobile devices connect to the Internet, predicted first-quarter sales that may fall short of some estimates, citing tepid demand for semiconductors used in phone networks.
Revenue will be $1.82 billion to $1.98 billion, the Irvine, California-based company said in a statement yesterday. Analysts on average estimated sales of $2 billion, according to data compiled by Bloomberg.
Sales of Broadcom chips that go into mobile-phone and other communication-network equipment fell 9 percent in the fourth quarter from the previous period, as companies held off on new machinery purchases. The market remains soft as carriers curtail capital expenditures, according to Chief Executive Officer Scott McGregor.
“We’ll have to wait for capex to come back,” McGregor told analysts on a conference call. “The market is more than normally depressed at this point.”
Broadcom fell as much as 3.4 percent in extended trading following the announcement yesterday. The stock had earlier declined 1 percent to $33.71 at yesterday’s close in New York.
Net income in the fourth quarter fell to $251 million, or 43 cents a share, from $254 million, or 45 cents, a year earlier, the company said. Revenue rose 15 percent to $2.03 billion. Analysts on average projected a profit of 39 cents on sales of $2.06 billion, according to data compiled by Bloomberg.
Under McGregor, Broadcom is also moving into the market for so-called baseband chips used to connect phones to 3G cellular networks, an area dominated by Qualcomm Inc. Broadcom has won Samsung Electronics Co. and Nokia Oyj as customers for those chips.