ReutersDec 07, 2017 11:25:00 IST
Broadcom Ltd on 6 December reported a better-than-expected quarterly profit and boosted its dividend by 72 percent, days after the chipmaker took its $103 billion bid for Qualcomm Inc hostile.
Shares of Broadcom rose 5 percent in extended trading after the company also forecast first-quarter revenue largely above analysts’ estimates. The company said on Monday it planned to field a slate of 11 nominees to Qualcomm’s board, its first formal move towards a hostile bid for the U.S. chipmaker.
Broadcom’s move came after Qualcomm rejected its $70 per share bid, saying the offer undervalued the company and would face regulatory hurdles. However, Broadcom’s chief financial officer, Thomas Krause, appeared confident of overcoming regulatory hurdles.
“After having had initial meetings with certain relevant antitrust authorities, we remain confident that any regulatory requirement necessary to complete the combination will be met in a timely manner,” Krause said in a post-earnings call.
A combined Broadcom-Qualcomm would become the dominant supplier of chips used in the 1.5 billion or so smartphones expected to be sold around the world this year. Broadcom’s wireless business has been a strong performer as soaring sales of Apple Inc’s iPhone and Android smartphones drive demand for its WiFi and Bluetooth chips.
The business far outperformed its wired infrastructure unit, which makes chips for set-top boxes and cable modems, with a 33.4 percent rise in sales and accounted for much of its fourth-quarter profit.
Excluding items, the company earned $4.59 per share in the quarter ended Oct. 29, easily beating analysts’ expectations of $4.52 per share. Net revenue rose to $4.84 billion, slightly above the $4.83 billion analysts had estimated.
The company also forecast current-quarter revenue of $5.30 billion, plus or minus $75 million, helped by its acquisition of network gear maker Brocade Communications Systems.
Analysts on average were expecting revenue of $4.83 billion, according to Thomson Reuters I/B/E/S. Broadcom also raised its quarterly dividend to $1.75 per share from $1.02.
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