Broadcom recently reported its fiscal third-quarter results, which exceeded Wall Street’s expectations for both revenue and earnings. The company posted earnings per share of $1.24 adjusted, beating the expected $1.20. Additionally, revenue came in at $13.07 billion, surpassing the $12.97 billion that was anticipated. Overall, these numbers indicate a strong performance for Broadcom in the quarter that ended on August 4th.
Market Reaction
Despite the positive results, Broadcom’s shares fell by 7% in extended trading. This decline was primarily due to the company’s guidance for the upcoming quarter being in-line with expectations. Broadcom projects revenue of $14 billion for the current quarter, along with earnings per share of $1.36, slightly below the expected $1.40 per share on $14.04 billion in revenue.
Broadcom reported a net loss of $1.88 billion, or a loss of $0.40 per share, compared to a net income of $6.12 billion, or $1.24 per share, in the year-ago quarter. The company attributed this loss to a one-time tax provision of $4.5 billion related to the transfer of intellectual property rights between company segments in the U.S. as part of supply chain management.
Future Projections
Broadcom has high hopes for its future performance, with CEO Hock Tan stating that the company expects to generate $12 billion in sales from AI parts and custom chips by fiscal 2024, up from a previous estimate of $11 billion. The company’s continued focus on AI semiconductor solutions and VMware has been a key driver of revenue growth.
Broadcom reported $7.27 billion in semiconductor sales during the quarter, marking a 5% increase year-over-year. This segment remains the largest contributor to Broadcom’s revenue, overshadowing the $5.8 billion generated by the infrastructure software segment, which includes revenue from the company’s VMware acquisition.
Overall, Broadcom’s fiscal third-quarter results highlight the company’s strong performance in key areas like AI semiconductor solutions and VMware. Despite the market reaction to guidance, Broadcom’s continued growth trajectory and focus on innovative technologies position it well for future success.