Despite beating Wall Street forecasts with its financial results, shares of Broadcom (AVGO) are down 10% after the chipmaker issued weak forward guidance for the remainder of this year.
Silicon Valley-based Broadcom reported earnings per share (EPS) of $1.24 U.S., which topped the $1.20 U.S. expected among analysts who track the company’s progress.
Revenue in what was the company’s fiscal third quarter totaled $13.07 billion U.S., which beat the $12.97 billion U.S. that had been anticipated on Wall Street.
The company reported $7.27 billion U.S. in semiconductor sales during the latest quarter, up 5% from a year earlier.
Infrastructure software sales totaled $5.8 billion U.S., with much of it coming from the company’s VMware acquisition that concluded last year.
However, despite beating forecasts on the top and bottom lines, Broadcom’s stock is sinking after the company issued tepid forward guidance that was largely in-line with expectations.
Management at Broadcom said they expect current-quarter revenue of $14 billion U.S. versus a consensus Wall Street estimate of $14.04 billion U.S.
Broadcom added that it expects $12 billion U.S. in sales from artificial intelligence (A.I.) parts and custom chips in its current fiscal year, up from a previous forecast of $11 billion U.S.
Broadcom’s microchips and processors are widely used for big data centres or to create infrastructure for A.I.
Prior to today (Sept. 6), Broadcom’s stock had risen 40% this year to trade at $152.82 U.S. per share following a 10-for-1 stock split this summer.
