Broadcom's fourth-quarter results exceed expectations
By Noel Randewich
SAN FRANCISCO (Reuters) - Broadcom Corp (BRCM.O: Quote) posted fourth-quarter results on Thursday that exceeded Wall Street's expectations as the Apple supplier increased its focus on Wi-Fi and broadband chips, sending its shares higher.
The chipmaker's results appeared to be supported by strong sales at key customer Apple Inc (AAPL.O: Quote), which this week said it sold 74.5 million iPhones in its fiscal first quarter, trampling expectations.
"They're probably benefiting from the upside of the iPhone 6, but probably offset by Samsung smartphones not selling so well and some weakness in the Chinese handset market," said Kevin Cassidy, an analyst at Stifel Nicolaus.
Shares of Synaptics Inc (SYNA.O: Quote), which makes display drivers for smartphones, surged in extended trade after it posted fiscal second-quarter results above expectations.
Broadcom shares have soared 28 percent since the company said in June it was deciding how to get out of baseband technology after falling behind in the development of 4G technology increasingly used by carriers.
Exiting that business frees up resources to focus on the company's better-performing networking and broadband businesses and the company in December returned some of its freed up cash to shareholders with an increased dividend.
Broadcom, a leader in connectivity chips with features like Wi-Fi and Bluetooth, reported fourth-quarter revenue of $2.14 billion, up 3.8 percent from the year-ago period.
It also said revenue in the first quarter would be $2.0 billion, plus or minus $75 million. Continued...