[ad_1]
(Bloomberg) – Broadcom Inc. reported a modest quarterly growth and reiterated its position on the rest of the fiscal year, stating that China and the US are still suppressing demand for semiconductors.
Sales in the period ended Aug. 4 rose to $ 5.52 billion, the San Jose, California-based company said Thursday in a statement. Before certain items, profit was $ 5.16 a share. That compares with average analyst estimates for $ 5.13 on sales of $ 5.52 billion, based on data compiled by Bloomberg.
Broadcom said it still expects revenue in fiscal 2019 to be $ 22.5 billion, a low projection it made in June. The company no longer provides quarterly predictions and instead updates its annual target at the end of each quarter. Shares declined about 1.3% in extended trading.
Chief Executive Officer Hock Tan has built a $ 100 billion company through a spate of acquisitions, including its acquisition of Symantec Corp. for $ 10.7 billion in August. While Broadcom has been one of the broadcasters in the technology industry, it has become immune to the ongoing trade-off between the US and China and blacklisting of Huawei Technologies Co., which is hammering Tan's semiconductor business.
"We believe this is going to be a problem in the current environment," Tan said in the statement. There's little visibility in the trade and no sense of a "sharp recovery around the corner," he added on a conference call.
About half of the chips Broadcom sells are being used in China or being made to be part of the world. Last year, Huawei accounted for $ 900 million in Broadcom's sales, Tan said.
The chipmaker's position as a major manufacturer of components for Apple Inc. and Samsung Electronics Co. is one of the world's largest smartphone makers. It's also one of the leading suppliers of networking components used by broadcasters such as Alphabet Inc.'s Google and Amazon.com Inc.'s cloud division.
Tan said that there is a "seasonal uptick" in his North American customer, "using his typical reference for Apple. Orders at this point are typical of the buildup ahead of a phone release, and sales of the devices will be determined in the future. Apple's iPhone 11 goes on sale Sept. 20.
Three months ago, Tan said it would be worthwhile for the year, indicating that it would be a billion dollars lighter than previously expected. That has held back Broadcom's stock, which is up 18% this year, compared with a 39% advance by the Philadelphia Stock Exchange Semiconductor Index.
Chief Financial Officer Tom Krause said on the conference call. Doing so is important to retaining the company's investment-grade credit rating.
Net income in the fiscal quarter fell to $ 715 million, or $ 1.71 a share, from $ 1.2 trillion, or $ 2.71, a year earlier, Broadcom said. Chip unit sales were about $ 4.4 billion in the recent period, accounting for 79% of the company's total revenue. They were down 4.7% from a year earlier.
(Updates with comments from executives starting in fifth paragraph)
Ian King in San Francisco at [email protected]
To contact the editors responsible for this story: Jillian Ward at [email protected], Molly Schuetz
<p class = "canvas-atom-canvas-text Mb (1.0em) Mb (0) – sm Mt (0.8em) – sm" type = "text" content = "For more articles like this, please visit us at bloomberg.com"data-reactid =" 32 "> For more articles like this, please visit us at bloomberg.com
© 2019 Bloomberg L.P.
[ad_2]
Source link