Broadcom profits grow as business storage activity grows

"We buy CA because of their customers and [CA’s] importance to these customers, "said Tan during Thursday's call to review the third quarter results. "CA sells critical software to almost every major company in the world."

The proposed buyback of $ 19 billion, months after its hostile bid of $ 117 billion

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Tom Krause, chief financial officer of Broadcom, had previously told the Wall Street Journal that he had been blocked by President Trump, would represent a strategic move for Broadcom and would roughly triple the size of his current market.

At the same time, corporate storage revenue, up nearly 60% at three quarters of the year, was supported by the acquisition of Brocade last year. Excluding Brocade's contribution, Tan told analysts in June that activity would be more or less stable from one year to the next.

In Thursday's call, Krause said the company had asked questions and pointed out that the company did not see any fundamental change in its long-term growth rate or in that of its core business.

In the last quarter, company officials said the cable and enterprise storage segments were once again boosting revenue growth, offsetting the continued weakness of the wireless segment. The wireless communications sector, MM. Tan and Krause said Thursday that it is expected to regain double-digit revenue growth in fiscal year 2020 after a temporary pullback in fiscal 2019.

The business storage segment, which grew strongly thanks to the acquisition of Brocade, saw its business turnover increase by 70% over the same period of the previous year. . However, even without Brocade's contribution, Tan said that "storage was robust year-over-year in the third quarter" and that growth in storage revenues should accelerate in the fourth quarter.

Overall, Broadcom's third-quarter earnings were $ 1.2 billion, or $ 2.71 per share, compared with $ 481 million ($ 1.14 per share) a year ago. Earnings from continuing operations increased from $ 4.10 per share a year earlier to $ 4.98 per share, while revenues from continuing operations increased 13% to $ 5.07 billion.

Analysts polled by Thomson Reuters were expecting a profit of $ 2.70 per share, or $ 4.83 after adjustment, on a $ 5.07 billion business figure.

The gross profit margin went from 48.2% a year earlier to 51.7%.

This quarter, Broadcom expects revenue of about $ 5.4 billion, against $ 5.35 billion expected by analysts.

On the basis of this forecast and the company's performance for the first nine months of the year, Mr. Krause stated that Broadcom provided for "another substantial increase" in quarterly dividends.

In December, Broadcom raised dividends to $ 1.75 per share, compared to $ 1.02 per share.

Broadcom's policy is to distribute to shareholders one-half of its free cash flow for the prior year through cash dividends, with the remainder generally used for acquisitions or for the repurchase of shares.

As of August 5, Broadcom was reporting more than $ 2 billion in $ 2.13 billion in free cash flow.

Equities, which fell 16% in the market this year, rose 3.7% to $ 223.94 after hours.

Write to Maria Armental at [email protected]