Sat, Dec 08, 2018 - Page 10 News List

Broadcom provides strong sales forecast

SUNNY CLOUD:The chipmaker has maintained growth thanks to orders from cloud providers like Google and Amazon that are expanding their data center networks


Chipmaker Broadcom Inc on Thursday gave a strong sales forecast for next year thanks to heavy spending by cloud providers.

The company’s wireless business, a key Apple Inc supplier, performed better than expected in the quarter that ended on Nov. 4.

Broadcom CEO Hock Tan (陳福陽) suggested that was driven by demand for older iPhones, but also warned of a “downtick” in the current quarter.

Revenue would be about US$24.5 billion in fiscal year 2019, San Jose, California-based Broadcom said in a statement.

Analysts had projected sales of US$22.45 billion, data compiled by Bloomberg showed.

The company has stopped giving quarterly estimates and is to concentrate on annual forecasts, which would be updated each quarter.

“Our outlook for the semiconductor business is for moderate revenue growth,” Tan said on a conference call with analysts referring to fiscal year 2019. “We expect continued robust demand from cloud customers.”

While the outlook for iPhone sales is weighing on other chipmakers, Broadcom has maintained growth via strong orders from cloud providers such as Google and Inc that are expanding their networks of data centers.

For the current quarter, total orders are “OK” and improving overall from the fourth quarter, Tan said.

Revenue from Broadcom’s wireless business fell from a year earlier, but it exceeded the company’s expectations because of “upside volumes of legacy phone generations from our North American customer,” Tan said, referring to Apple.

He said that he expects a “seasonal downtick” in the quarter ending late next month — in line with what other chipmakers have reported.

Broadcom shares rose 4.7 percent in extended trading after the results.

Earlier, the shares closed at US$227.24 in New York, leaving them down 12 percent this year.

Broadcom’s main semiconductor business is used by analysts and investors as an indicator of the confidence major smartphone makers have in current demand and future products. Its Wi-Fi chips are part of leading models by Apple and Samsung Electronics Co.

Net income was US$1.12 billion, or US$2.64 per share, in the fiscal fourth quarter, compared with US$532 million, or US$1.25 per share, a year earlier. Revenue rose 12 percent to US$5.44 billion.

By division, wired infrastructure had sales of US$2.2 billion, up 3 percent from a year earlier.

Wireless communications revenue was US$1.7 billion, down 5 percent from a year earlier.

The enterprise storage unit reported sales of US$1.3 billion, almost double last year’s total, helped by an acquisition.

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