January 29, 2015 / 9:24 PM / 3 years ago

Broadcom's fourth-quarter results exceed expectations

Broadcom Corporation President and Chief Executive Officer Scott McGregor stands in front of the company's logo in Taipei March 18, 2010. REUTERS/Pichi Chuang

SAN FRANCISCO (Reuters) - Broadcom Corp BRCM.O 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), 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), 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.

Analysts on average had expected fourth-quarter revenue of $2.11 billion and expect first-quarter revenue of $2.01 billion, according to Thomson Reuters I/B/E/S.

In the fourth quarter, Broadcom posted a net profit of $390 million, or 64 cents a share, compared with a net profit of $168 million, or 29 cents a share, last year.

Non-GAAP earnings per share totaled 76 cents in the fourth quarter, including stock-based compensation.

Not including stock-based compensation, Broadcom said its EPS was 90 cents compared to 87 cents expected by analysts.

Shares of Synaptics rose 9.65 percent in extended trade after closing regular trade up 1.91 percent at $68.31.

Broadcom’s stock rose 1.67 percent in extended trading after ending up 0.82 percent at $41.31 on Nasdaq.

Reporting by Noel Randewich; editing by Meredith Mazzilli and G Crosse

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