Chipmaker Broadcom (AVGO) late Thursday easily topped Wall Street’s targets for its fiscal third quarter and guided higher for the current period. But AVGO stock slid in extended trading.
The San Jose, Calif.-based company earned an adjusted $6.96 a share on sales of $6.78 billion for the quarter ended Aug. 1. Analysts expected Broadcom earnings of $6.88 a share on sales of $6.76 billion, according to FactSet. On a year-over-year basis, Broadcom earnings rose 29% while sales climbed 16%.
For the current quarter ending Oct. 31, Broadcom expects to generate revenue of $7.35 billion, up 14% year over year. That topped analyst expectations for $7.23 billion in sales in the fiscal fourth quarter.
“Broadcom delivered record revenues in the third quarter reflecting our product and technology leadership across multiple secular growth markets in cloud, 5G infrastructure, broadband, and wireless,” Chief Executive Hock Tan said in a news release. “We are projecting the momentum to continue in the fourth quarter.”
AVGO Stock Drops Late
In after-hours trading on the stock market today, AVGO stock fell 0.8%, near 488. During the regular session Thursday, AVGO stock dipped 0.3% to 491.90.
Broadcom makes wireless chips for smartphones, such as Apple (AAPL) iPhones. It also makes semiconductors for broadband communications, networking, storage and industrial applications. Plus, Broadcom has a growing business in infrastructure software for mainframes, data centers and cybersecurity.
Semiconductor products accounted for 74% of Broadcom’s revenue in the third quarter. Infrastructure software contributed 26% of sales.
Broadcom Dips Below Buy Point
AVGO stock ranks No. 12 out of 29 stocks in IBD’s fabless chipmaker industry group, according to IBD Stock Checkup. Broadcom stock has an IBD Composite Rating of 96 out of 99. The Composite Rating scores a stock’s key growth metrics against all other stocks regardless of industry group.
Follow Patrick Seitz on Twitter at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
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