Broadcom reports £462 million of net income in the fiscal third quarter

Broadcom Inc. (NASDAQ: AVGO) blew past Wall Street estimates for earnings and revenue in the fiscal third quarter on Thursday. The company reported £462.46 million of net income in Q3 that translates to £1.09 per share. In the same quarter last year, however, its net income had come in higher at £538.53 million or £1.29 per share.

Shares of the company initially jumped more than 2% in extended trading on Thursday but then settles at the same price at which it closed the regular session. Broadcom is now exchanging hands at £265.15 per share that represents an over 100% recovery after hitting a year to date low of £126.50 per share in March.

Broadcom’s Q3 financial results versus analysts’ estimates

On an adjusted basis, the company earned £4.07 per share in the fiscal third quarter versus the year-ago figure of £3.89 per share. In terms of revenue, Broadcom jumped from £4.16 billion last year to £4.38 billion in Q3.

According to FactSet, experts had forecast the company to print £4.34 billion in revenue in the recent quarter. For earnings per share, they had estimated £3.95. CEO Hock Tan of Broadcom commented on the earnings report on Thursday and said:

“We delivered third quarter revenue results in-line with our expectations, driven by healthy demand from cloud and telecom customers, which more than offset the expected reset in wireless.”

The software firm said it generated £3.18 billion of sales from chips that represents a 4% decline on a year over year basis. Its infrastructure software sales, on the other hand, were 41% higher in the recent quarter at £1.21 billion.

FactSet consensus for chip sales was capped at £3.14 billion and for infrastructure software sales at £1.21 billion. Earlier this year in June, Nokia announced Broadcom as its third partner to develop 5G chips.

Broadcom’s guidance for the fiscal fourth quarter

For the fiscal fourth quarter, Broadcom now forecasts its revenue to lie in the range of £4.71 billion to £4.93 billion. Analysts have predicted a lower £4.67 billion in revenue for the company in Q4. Broadcom completed its acquisition of Symantec’s enterprise security business in 2019.

At the time of writing, the San Jose-based company has a market cap of £106.66 billion and a price to earnings ratio of 63.01.