Written by StockNews.com
Broadcom Ltd. (Nasdaq: AVGO) late Wednesday [Mar 1, 2017 | 4:01pm] posted market-beating fiscal first quarter earnings results and offered a bullish outlook for Q2, as gross margins continued to grow in the post-Avago merger era.
The Irvine, CA-based semiconductor maker reported adjusted Q1 EPS of $3.63, which was $0.15 better than the Wall Street consensus estimate of of $3.48.
Revenues surged 132.8% from last year to $4.15 billion, also topping analysts’ view for $4.08 billion. The bulk of the revenue gains came as a result of Avago’s acquisition of Broadcom, which was completed in February 2016.
Gross margins saw a significant bump in the latest period, to 62.4% percent of net revenue, up from 61.1% in the year-ago period.
Broadcom’s guidance for the current quarter also topped expectations. The company expects Q2 revenues of $4.025 to $4.175 billion, which would beat Wall Street’s current estimate of $3.9 billion. Meanwhile, gross margins are seen between 61% and 63%.
The company commented via press release:
“We had a very good start to our fiscal year 2017 delivering first quarter revenue and gross margin at the top end of guidance,” said Hock Tan, President and CEO of Broadcom Limited. “We expect healthy demand for our products to continue and we are guiding second fiscal quarter revenue to grow organically by 15% on a year over year basis.”
Broadcom shares rose $8.11 (+3.77%) to $223.25 in after-hours trading Wednesday. Year-to-date, AVGO had gained 21.50% prior to today’s report, versus a 7.25% rise in the benchmark S&P 500 index during the same period.
AVGO currently has a StockNews.com POWR Rating of A (Strong Buy), and is ranked #3 of 94 stocks in the Semiconductor & Wireless Chip category.
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