(Reuters) - Broadcom Inc's
The 17-month long trade war between the United States and China and sanctions on China's Huawei Technologies pressured its core semiconductor business for the past few quarters.
The company expects 2020 full-year revenue to be about $25 billion (£19.49 billion), plus or minus $500 million, beating analysts' estimate of $23.79 billion, according to IBES data from Refinitiv.
The outlook pointed to a weaker-than-expected wireless business, said Kinngai Chan, an analyst with Summit Insights Group.
He added that $25 billion is not a very strong outlook with its semiconductor business expected to grow at about 4% year-over-year to about $18 billion.
Broadcom, on a post-earnings call said that Symantec Corp's enterprise security unit, its latest $10.7 billion acquisition, is expected to contribute about $1.8 billion next year.
The 2020 guidance was actually a little light on the Street as revenue from Symantec was expected to be about $2 billion, said Christopher Rolland, analyst with Susquehanna Financial Group.
Shares of Broadcom initially rose after market on better-than-expected 2020 revenue forecast boosted by upcoming 5G adoption.
The semiconductor business will return to year-over-year growth in the second half of the company's fiscal year, Chief Executive Officer Hock Tan said in a statement.
Apple 5G smartphone ramp will drive year-over-year growth in its wireless business in second half of 2020, added Chan.
Brokerage BofA Global Research on Wednesday predicted that Apple 5G phones could make up nearly one-third of the global market for 5G smartphones in the next three years.
Fellow Apple supplier Qualcomm Inc
For the fourth quarter, Broadcom also beat revenue and profit estimates, boosted by growth in the software business that helps to manage and secure applications across mobile, cloud and mainframe platforms.
Broadcom reported revenue of $5.78 billion in the fourth quarter, edging past estimates of $5.73 billion.
Excluding items, the company reported profit of $5.39 per share, topping expectation of $5.35.
The company raised its target dividend by 23% to $3.25 per share per quarter for fiscal year 2020.
(Reporting by Ayanti Bera in Bengaluru; Editing by Sriraj Kalluvila and Shailesh Kuber)
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Updated Date: Dec 13, 2019 06:07:23 IST