Broadcom exceeded Wall Street’s expectations for its fiscal third quarter, posting stronger-than-expected earnings and revenue.
Despite the positive results, the company’s stock fell 7% in extended trading as its forward guidance aligned with forecasts, offering no surprises to investors.
For the quarter ending August 4, Broadcom reported:
- Earnings per share: $10.54 adjusted vs. $10.43 expected
- Revenue: $8.12 billion vs. $8.06 billion expected
The company projects fourth-quarter revenue to hit $14 billion, close to analyst predictions of $14.04 billion.
However, Broadcom’s third-quarter results were impacted by a net loss of $1.88 billion, compared to net income of $6.12 billion in the same period last year.
This loss stems from a one-time $4.5 billion tax provision, tied to transferring intellectual property between company divisions as part of a broader supply chain strategy.
Despite the earnings dip, Broadcom has seen strong growth, with shares rising 75% in the last year.
The company has been gaining traction as a key player in the AI boom, producing essential components for data centers and AI infrastructure.
Broadcom’s collaboration with Google on its TPU chip, used by Apple to power AI features, has drawn significant attention.
CEO Hock Tan highlighted the company’s growing momentum, projecting $12 billion in AI chip and custom part sales for fiscal 2024, up from a previous estimate of $11 billion.
He emphasized that Broadcom’s success in AI solutions continues to be a driving force behind its performance.
“Broadcom’s third-quarter results reflect continued strength in our AI semiconductor solutions and VMware,” Tan stated.
Semiconductor sales reached $7.27 billion in the quarter, a 5% increase year-over-year, outpacing the company’s infrastructure software segment, which recorded $5.8 billion, largely due to the VMware acquisition.
Broadcom’s future in AI technology remains critical, with the business closely watched as it navigates increasing competition in the AI sector.
You May Also Like: Broadcom Poised for AI Upside Despite Chip Industry Slump, Says Analyst
