Broadcom exceeded analysts expectations when it presented its first-quarter financial results and provided a forecast for the next quarter that was also higher than the consensus analysts estimate.
The reason for this anticipated increase in revenue is that AI has emerged as a bright spot for chip firms such as Nvidia Corp and Broadcom, owing to the technology’s broad potential applications, as demonstrated by OpenAI’s chatbot ChatGPT.
Broadcom, which provides networking chips used in data centers as well as specialized chips that accelerate AI work, anticipates a 20% increase in networking revenue in the current quarter.
Broadcom’s financial results have also been promising in the past, with the company reporting an increase in revenue and profits in the first quarter of 2023. This pattern is likely to continue in the second quarter. Broadcom reported a $3.77 billion net income in the first quarter, with earnings before certain costs such as stock-based compensation coming in at $10.33 per share, up from $8.33 per share a year ago.
Revenue for the quarter increased 16% year on year to $8.91 billion. The results were impressive, with Wall Street expecting earnings per share of $10.17 on sales of $8.9 billion. Broadcom expects revenue of around $8.7 billion in the second quarter, just ahead of Wall Street’s forecast of $8.58 billion.
Broadcom also declared a $4.60 quarterly dividend per share. Its shares recovered some of their losses and were up 0.4% in extended trading. According to Refinitiv data, third-quarter revenue is expected to be around $8.7 billion, while analysts expect $8.59 billion. Revenue increased 16% to $8.92 billion in the first quarter, while adjusted earnings per share of $10.33 exceeded expectations of $10.10.
The sources for this piece include an article in Reuters.
