Broadcom Projects Robust Sales on Strong Smartphone Demand

Broadcom gave an upbeat sales forecast, indicating that its smartphone customers are optimistic about demand, according to Bloomberg.

Revenue in the period that ends Feb. 4 will be about $5.3 billion, the San company said in a statement. That compares with analysts’ average estimate of $4.83 billion, according to data compiled by Bloomberg. The forecast includes a partial contribution from the recently acquired networking business of Brocade Communications Systems.

The company’s wireless communications business, which supplies components such as Wi-Fi chips, chalked up revenue growth of 33 percent to $1.8 billion in the fiscal fourth quarter. Sales in its biggest division, wired infrastructure, increased 3 percent to $2.1 billion.

The company is sticking to its long-term target of 5 percent annual sales growth while predicting it will be more profitable than previously thought. Broadcom is aiming for a gross margin, the percentage of sales remaining after deducting costs of production, of 65 percent, 5 percentage points higher that it had expected. Gross margin in the just-reported quarter was 63 percent.

Net income in the period ended Oct. 29 was $671 million, or $1.50 a share, compared with a loss of $668 million, or $1.59, a year earlier. Adjusted earnings per share from continuing operations were $4.59, compared with analysts’ average projection of $4.52. Revenue rose 17 percent to $4.84 billion, just beating analysts’ estimates.