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Broadcom
Inc.
AVGO 0.86%
Huawei Technologies Co., hard hit by trade tensions and export restrictions imposed by the United States on China, said on Thursday that its main semiconductor business had reached its low point but was not the only source of revenue. was not quite in the recovery phase yet.
General manager
Hock Tan,
During a conference call with analysts, he said he was confident that the bottom of the cycle had been reached, but that it was too early to talk about a turnaround.
"We are managing the business with the hope of continuing to operate in an uncertain and very low growth macroeconomic environment in the near future," Tan said.
Broadcom maintained its revenue target of $ 22.5 billion for the year ended Nov. 3, including $ 17.5 billion from semiconductor solutions and $ 5 billion from infrastructure software.
Huawei, blacklisted by the United States for national security reasons, generated about $ 900 million, or 4.3%, of last year's revenues.
Apple
First customer of Broadcom, last year.
Tan, who built Broadcom through a series of bold acquisitions, signed a $ 10.7 billion purchase agreement last month
Symantec
The enterprise security company. The agreement, as well as the 2017 acquisition of Brocade Communications Systems Inc. and the acquisition of CA Technologies in 2018, are part of a major – and expensive – gamble around software development. # 39; s infrastructure.
On Thursday, Broadcom executives said the company would maintain its dividend policy of paying investors half of its free cash flow the previous year, but would focus on debt repayment rather than on debt. redemption of shares.
"Especially in light of the macroeconomic environment we are seeing today," said the chief financial officer.
Thomas Krause
"We are aware of the risk created by our leveraged balance sheet and we are very focused on managing these risks."
At August 4, at the end of Broadcom's third quarter, the company had generated free cash flow of approximately $ 6.88 billion, with the money remaining after payment of fees. Broadcom expects to reach about $ 9 billion by the end of the year, up from $ 8.25 billion a year ago.
The company, based in Silicon Valley, announced a profit down 7.1 million USD, or 2.71 USD per share, against 715 million USD in the third quarter, or 1.71 USD per share, while the expenses of Operations had jumped 69% to 2.17 billion USD. Earnings from continuing operations were $ 5.16 per share, compared with $ 4.98 a year ago.
Net revenues increased 9% to $ 5.52 billion.
Analysts surveyed by FactSet were forecasting earnings per share of $ 1.21, or adjusted $ 5.13, on a turnover of $ 5.52 billion.
The gross profit margin improved to 55% from 51.7% a year earlier.
This is Broadcom's first financial report since the main European anti-competitive regulator opened an investigation into the company, alleging that Broadcom was dominating the chip market for modems and set-top boxes to limit competition. . The European Commission also said that it would make the very rare decision to order the company to immediately stop certain practices that it says are anticompetitive, the first time the competition authorities of the United States European Union have imposed such interim measures for 18 years.
Broadcom defended its business practices and declared not to expect a significant impact from the investigation.
Broadcom shares, which have almost reached record levels, closed Thursday at $ 300.58, up 0.9% for the day.
Write to Maria Armental at [email protected]
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