Chipmaker and infrastructure software provider Broadcom late Thursday handily beat expectations for its fiscal first quarter. However, it kept its sales guidance for the full year unchanged. Broadcom stock dropped in extended trading.
The Palo Alto, Calif.-based company earned an adjusted $10.99 a share on sales of $11.96 billion in the quarter ended Feb. 4. Analysts polled by FactSet had expected earnings of $10.40 a share on sales of $11.8 billion. On a year-over-year basis, Broadcom earnings rose 6%. Sales jumped 34% thanks to its recent acquisition of VMware. Excluding VMware, Broadcom's sales increased 11%.
Broadcom reiterated its revenue guidance for the full year of $50 billion, up 40% with the contribution from VMware.
Semiconductor products accounted for 62% of Broadcom's revenue in the first quarter. Meanwhile, infrastructure software contributed 38% of sales. Chip sales rose 4% to $7.39 billion while infrastructure software sales jumped 153% to $4.57 billion.
Broadcom Stock Dips After Report
In after-hours trading on the stock market today, Broadcom stock dipped roughly 1% to 1,395. During the regular session Thursday, Broadcom stock rose 4.2% to close at 1,407.01.
"We are pleased to have two strong drivers of revenue growth for Broadcom in the first quarter and fiscal year 2024," Chief Executive Hock Tan said in a news release. "First, our acquisition of VMware is accelerating revenue growth in our infrastructure software segment, as customers deploy VMware Cloud Foundation."
"Second, strong demand for our networking products in AI data centers, as well as custom AI accelerators from hyperscalers, are driving growth in our semiconductor segment," Tan said.
Broadcom Is An IBD Tech Leader
Broadcom designs, develops and supplies a broad range of semiconductor, enterprise software and security solutions. Its product portfolio covers such areas as data centers, networking, broadband, wireless, storage, industrial and enterprise software.
On Jan. 19, Broadcom shares broke out of an ascending base at a buy point of 1,151.82, according to IBD MarketSurge charts.
Broadcom stock notched a record high of 1,438.17 on March 4 before pulling back. Its high was within the 20%-to-25% profit-taking zone, according to IBD trading guidelines.
Also, Broadcom stock is on the IBD Tech Leaders list.
Follow Patrick Seitz on X, formerly Twitter, at @IBD_PSeitz for more stories on consumer technology, software and semiconductor stocks.
