Broadcom recently reported its fiscal third-quarter results, surpassing Wall Street expectations for both revenue and earnings. Despite this positive outcome, Broadcom’s shares fell by 7% in extended trading. The company’s adjusted earnings per share stood at $1.24, beating the expected $1.20, while its revenue reached $13.07 billion compared to the estimated $12.97 billion.
Although Broadcom’s performance for the quarter was commendable, its guidance for the upcoming quarter met expectations, leading to a decline in share value. The company projects a revenue of $14 billion for the current quarter and anticipates earning $1.36 per share, slightly missing the $14.04 billion estimate.
Broadcom reported a net loss of $1.88 billion, or 40 cents per share, contrasting with the net income of $6.12 billion, or $1.24 per share, in the year-ago quarter. The company attributed the loss to a one-time tax provision of $4.5 billion related to trading intellectual property rights between segments located in the U.S. as part of its supply chain management strategy.
Broadcom’s stock has surged by 75% over the past year, primarily due to its essential involvement in providing components for data centers and infrastructure supporting artificial intelligence. Notably, the company collaborates with tech giants like Google and Apple, contributing to the advancement of AI technology. CEO Hock Tan expressed confidence in the company’s growth potential, as Broadcom aims to achieve $12 billion in sales from AI parts and custom chips by fiscal 2024, surpassing the initial forecast of $11 billion.
During the third quarter, Broadcom’s semiconductor sales amounted to $7.27 billion, marking a 5% increase from the previous year. This segment continues to outshine the infrastructure software division, which reported sales of $5.8 billion, largely driven by the VMware acquisition.
While Broadcom’s fiscal third-quarter results showcased impressive financial performance and growth prospects, factors like tax provisions and guidance for the upcoming quarter impacted investor sentiment. The company’s strategic focus on AI semiconductor solutions and collaborations with industry leaders position it favorably in the evolving tech landscape.