Hock Tan, CEO of Broadcom
Lucas Jackson | Reuters
Broadcom reported third fiscal quarter results on Thursday that beat Wall Street expectations for revenue and earnings.
Broadcom shares fell 5% in extended trading.
Here’s how the chipmaking conglomerate did versus LSEG consensus estimates for the quarter ending Aug. 4:
- Earnings per share: $1.24, adjusted versus $1.20 expected
- Revenue: $13.07 billion versus $12.97 billion expected
Broadcom expects current-quarter revenue of $14 billion, versus $1.36 per share on $14.04 billion expected.
Broadcom reported a net loss of $1.88 billion, or a loss of forty cents per share, versus net income in the year-ago quarter of $6.12 billion, or $1.24 per share.
The company said the net loss for the third quarter includes a one-time tax provision of $4.5 billion related to trading intellectual property rights from one company segment to another based in the U.S. as part of supply chain management.
Broadcom stock is up 75% in the past year as investors have come to appreciate that the company produces several parts that are required for big data centers or can be used to create infrastructure for artificial intelligence. For example, Broadcom works on Google’s TPU chip, which Apple used to train some of its AI features.
Broadcom CEO Hock Tan said in a statement that the company expects to record $12 billion in sales from AI parts and custom chips in fiscal 2024.
“Broadcom’s third quarter results reflect continued strength in our AI semiconductor solutions and VMware,” Tan said in a statement. The company reported $7.27 billion in semiconductor sales during the quarter, up 5% annually. It’s still larger than Broadcom’s infrastructure software segment, which reported $5.8 billion in sales, much of which is from the company’s VMware acquisition.