Broadcom Profit Surges as Enterprise Storage Business Grows
06 Setembro 2018 - 7:53PM
Dow Jones News
By Maria Armental
Broadcom Inc. on Thursday posted the sixth straight quarter of
profit, more than doubling from the prior year as stronger demand
for products used in data centers continues to drive sales
growth.
In the first earnings report since the company announced plans
to buy software company CA Inc. for about $19 billion, Broadcom
said wired infrastructure and enterprise storage again drove
revenue growth in the latest period, offsetting continued weakness
in its wireless communications segment.
The proposed takeover, months after its $117 billion-plus
hostile bid for Qualcomm Inc. was blocked by President Trump,
represents a strategic move for Broadcom and would roughly triple
the size of its current opportunity in the estimated $200 billion
market for infrastructure technology, Broadcom finance chief Tom
Krause told The Wall Street Journal in an interview.
Meanwhile, enterprise storage revenue, up nearly 60% three
quarters into the company's business year, has been bolstered by
last year's Brocade acquisition. Stripping out the Brocade
contribution, Chief Executive Hock Tan told analysts in June that
the business would be roughly flat year-over-year.
Overall, Broadcom's third-quarter profit surged to $1.2 billion,
or $2.71 a share, from $481 million, or $1.14 a share, a year
earlier. Profit from continuing operations rose to $4.98 a share
from $4.10 a share a year earlier.
Revenue from continuing operations rose 13% to $5.07
billion.
Analysts surveyed by Thomson Reuters expected Broadcom to post a
profit of $2.70 a share, or $4.83 as adjusted, on $5.07 billion in
revenue.
Gross profit margin improved to 51.7% from 48.2% a year
earlier.
This quarter, Broadcom expects about $5.4 billion in revenue,
compared with analysts' projected $5.35 billion.
Shares, which lag the market with a 16% decline this year, rose
3.4% to $223.29 in after-hours trading.
Write to Maria Armental at maria.armental@wsj.com
(END) Dow Jones Newswires
September 06, 2018 18:38 ET (22:38 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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