Broadcom, Inc.’s fiscal third-quarter earnings results revealed the firm grew its business by 5.5 percent from 2019. The brand indicated its year-over-year sales uptick came from increased purchases of its cloud computing and telecom components.
The manufacturer also offered guidance for the fiscal fourth-quarter that forecast a 10.8 percent surge in annual sales.
Broadcom’s FQ3’s Results
In the last period, Broadcom made $5.82 billion, an improvement on its 2019 fiscal third-quarter revenue of $5.51 billion. The fabless chipmaker also recorded adjusted earnings per share (EPS) of $5.40, up from $5.16 EPS in the same timeframe last year. In addition, the company exited the quarter previous with adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) of $3.34 billion.
Yahoo! Finance notes Broadcom’s fiscal third-quarter gross income handily outpaced Wall Street’s projections. Market analysts wrongly anticipated the brand would generate $5.76 billion in sales against EPS of $5.24.
The firm’s results also topped the earnings forecast it released in June, beating its internal projections on revenue and EBITDA.
CEO Hock Tan said his company experienced some weakness in its wireless segment, but its robust cloud and telecom sales made up for it. Like many semiconductor providers, the manufacturer enjoyed a surge in sales because of pandemic related networking component demand. That said, the firm’s semiconductor business contracted by 4 percent from 2019.
The executive prepared shareholders for the shortfall in June by mentioning a client, thought to be Apple, had encountered a “major product cycle delay” that would negatively impact his brand’s fiscal third-quarter earnings. The device maker announced its annual mobile device refresh would be “a few weeks” later than usual in July.
On the bright side, Broadcom imrpvoed its software revenue by 41 percent from last year.
Broadcom’s (iPhone 5G-Enabled) Positive FQ4 Outlook
For FQ4, Broadcom anticipates making $6.4 billion, give or take $150 million, and adjusted EBITDA of $3.74 billion, plus or minus $75 million. If the company hits the midrange of its guidance, its sales will rise by 10.8 percent while its earnings will jump by 18.29 percent year-over-year.
Market watchers predict the manufacturer will bring in $6.14 billion in the current period.
Tan explained his firm based its FQ4 forecast on continuing strong demand for its cloud and telecom products. He also said Broadcom expects a significant increase in wireless revenue in the present quarter. Based on that statement, the company likely tied its near-term projection to the launch of the 5G iPhone.
Earlier this month, Bloomberg reported Apple intends to sell between 75 million and 80 million 5G-enabled flagship handset this year. As such, Broadcom’s growth expectation is justified as the brand’s sales will likely continue expanding into FQ1 2021.