Broadcom recently released its fiscal third-quarter results, surpassing both revenue and earnings expectations set by Wall Street analysts. Despite the positive news, Broadcom shares dropped by 7% in extended trading due to guidance that fell in line with expectations.
Earnings per share came in at $1.24 adjusted, higher than the expected $1.20. Meanwhile, revenue stood at $13.07 billion, exceeding the projected $12.97 billion. Looking ahead, Broadcom forecasts revenue of $14 billion for the current quarter, with an expected $1.36 per share on $14.04 billion. However, the company reported a net loss of $1.88 billion for the third quarter, compared to net income of $6.12 billion in the same period last year.
The notable net loss for the quarter can be attributed to a one-time tax provision of $4.5 billion related to trading intellectual property rights between segments within the company. Despite this setback, Broadcom remains optimistic about future sales, particularly in the AI semiconductor solutions and custom chips sectors, indicating a projected $12 billion in sales by fiscal 2024.
Broadcom’s stock performance has been impressive, jumping 75% in the past year. Investors have recognized the company’s vital role in providing key components for large data centers and infrastructure for artificial intelligence. For instance, Broadcom’s involvement in developing Google’s TPU chip, utilized by Apple for AI functionalities, showcases its importance in the tech industry.
CEO’s Confident Outlook
Broadcom’s CEO, Hock Tan, expressed satisfaction with the company’s progress, highlighting the strength of AI semiconductor solutions and VMware. With $7.27 billion in semiconductor sales during the quarter, marking a 5% increase from the previous year, Broadcom continues to maintain its position as a major player in the industry. Despite facing challenges, such as the impact of the VMware acquisition on infrastructure software sales, the company remains optimistic about its long-term growth prospects.