Stocks of chipmaker Broadcom climbed on after hours trading on Thursday after the company reported better than expected for the third quarter of the current fiscal. the company beat Wall Street’s estimate for profit even though its revenues was not up to expectations.
Against expectations of Wall Street analysts of earnings of $4.82 a share against sales of $5.07 billion for the third quarter, an adjusted $4.98 a share on sales of $5.06 billion was reported by the San Jose, California based firm for the quarter ended Aug. 5. The percentage increase in earnings for the period was 13 per cent compared to the earnings made by the company in the same period a year ago.
There the shares of the company rise by 3 per cent in after-hours trading despite noting a 2.5 per cent drop in the stocks in the regular session at $215.97 conforming ot the general selling trend in the semiconductor shares.
“Data center demand is driving strong growth in more than 50% of our consolidated revenue,” Chief Executive Hock Tan said in a press release. “Through the strength of our franchise business model, we delivered another quarter of sustained revenues and strong free cash flows.”
The adjusted gross profit margin for Broadcom in the quarter was 67.3 per cent. That figure was 66.6 per cent more than the quarter earlier and 63.3 per cent more than the same period a year ago.
The company is expecting an increase in sale by 12 per cent at $5.4 billion for the current quarter ending Nov. 4. The company however did not provide any target for per-share earnings.
According to the estimates of analysts at Wall Street, Broadcom was slated to report earnings of $5.21 a share against total revenues of $5.35 billion. That meant that the company would have made a 14 per cent increase in earnings per share and 10 per cent in sales year-over-year.
Chips for the he wired, wireless, enterprise storage and industrial end markets is manufactured by Broadcom.
Another chip maker Marvell Technology announced mixed results for its second fiscal quarter and issued guidance for the entire year that was well below the results of the current quarter.
The company reported earning of 28 cents per share against revenues of $665 million for the quarter ending Aug. 4. According to Zacks Investment Research, Wall Street was expecting the company to announce earnings of 29 cents per share against revenues of $616 million.
“Our combined talent and portfolio now positions Marvell to lead some of the most exciting trends driving growth in the infrastructure market, including cloud and edge computing, 5G and automotive,” said company Chief Executive Matt Murphy in a statement to the press.
(Adapted from Investors.com & MarketWatch.com)