Broadcom exceeded forecasters’ expectations when it delivered its quarterly results yesterday, with share values $0.12 higher than forecast.
The company’s enterprise storage sales – for which revenue jumped up 63 percent year-on-year – are booming, as are revenues for networking and broadband infrastructure. These made up close to half of the company’s revenue, or $2.29bn for the quarter, a nine percent increase on last year’s sales.
A bumpy ride
Meanwhile, its wireless communications segment, which accounts for a quarter of the company’s revenue, rose by only 13 percent year-on-year, and dropped 41 percent this quarter. CEO Hock Tan told Bloomberg this was because its largest North American smartphone customer - suggested to be Apple by analysts – sharply cut its orders in Q2.
The company’s net revenue reached $5.01bn, up from $4.19bn last quarter, and close to triple its 2015 results, according to Bloomberg. Over the course of three years, the company has expanded its business largely through acquisitions.
However, this year, it infamously failed to acquire Qualcomm as it intended following a series of events which included moving its headquarters from Singapore to the US and a meeting with US president Donald Trump.
Trump finally blocked the deal out of fear the company would cut off R&D investments - as Broadcom has a history of doing following acquisitions - and risk falling behind Chinese telecommunications company Huawei in commercializing 5G.